EUR/GBP Weekly Fundamental Analysis July 2-6, 2012, Forecast

Posted June 30, 2012 13:07 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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Introduction:The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to wider ranges. The GBP is does not seem to move in response to the EUR as directly currently. The UK austerity program vs. The EU debt crisis seems to have them moving in opposing distances. They are developing new trading personalities and there is a good deal of profit to be made trading this pair. They can be volatile.

The interest rate differential between the European Bank(ECB) and the Bank of England(BoE)
European and UK economic data
Growth differentials between the Euro zone and UK

Weekly Analysis and Recommendations

The EUR/GBP ended the quarter at 0.8062 as the euro soared from early morning Friday, after the pre dawn press conference by the EU Ministers introducing their “plan” to save the EU. This is the first time that the EU has proposed a short term immediate fix for the economic problems of its members. The plan was precise, comprehensive and goes into effect on July 9, 2012. Traders were caught by surprise, as no news of this plan had been leaked or released and all week leading up to the meeting, the Ministers was bickering and arguing and it looked like the Summit would just be another of the many with grand schemes but little action.

Date	Last	Open	High	Low	Change %
Jun 29, 2012	0.8062	0.8018	0.8094	0.8010	0.55%
Jun 28, 2012	0.8018	0.8009	0.8029	0.7986	0.10%
Jun 27, 2012	0.8010	0.7986	0.8016	0.7986	0.29%
Jun 26, 2012	0.7987	0.8033	0.8039	0.7985	-0.56%
Jun 25, 2012	0.8032	0.8047	0.8048	0.8020	-0.17%

This week brings two exciting events, that will effect this pair, the ECB and the BoE meetings. Markets are expecting action from both banks, an interest reduction from the ECB and additional monetary stimulus from the BoE.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of June 25 – 29 actual v. forecast for Euro, GPB and the Franc

Date	Currency	Event	Actual	Forecast	Previous
Jun 26	EUR	GfK German Consumer Climate	5.8	5.7	5.7
Jun 26	GBP	Public Sector Net Borrowing	15.6B	13.6B	-19.9B
Jun 27	EUR	German Prelim CPI m/m	-0.1%	0.0%	-0.2%
	GBP	BBA Mortgage Approvals	30.2K	32.8K	32.1K
	GBP	CBI Realized Sales	42	12	21
Jun 28	GBP	Nationwide HPI m/m	-0.6%	0.3%	0.2%
	EUR	German Unemployment Change	7K	4K	1K
	GBP	Current Account	-11.2B	-8.9B	-7.2B
	GBP	Final GDP q/q	-0.3%	-0.3%	-0.3%
	GBP	Final GDP q/q	-0.3%	-0.3%	-0.3%
	GBP	GfK Consumer Confidence	-29	-30	-29
	EUR	German Retail Sales m/m	-0.3%	0.1%	-0.2%
Jun 29	EUR	French Consumer Spending m/m	0.4%	0.0%	0.7%
	CHF	KOF Economic Barometer	1.16	0.87	0.80
	EUR	M3 Money Supply y/y	2.9%	2.4%	2.5%
	EUR	CPI Flash Estimate y/y	2.4%	2.4%	2.4%

Historical:

Highest: 1.2336 EUR on Jun 29, 2010.

Average: 1.1548 EUR over this period.

Lowest: 0.7950EUR on May 16, 2012

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date	Time	Currency	Event	Forecast	Previous
Jul 2	3:15am	CHF	Retail Sales y/y	0.9%	0.1%
	3:30am	CHF	SVME PMI	44.6	45.4
	3:45am	EUR	Italian Manufacturing PMI	44.6	44.8
	4:30am	GBP	Manufacturing PMI	46.7	45.9
	5:00am	EUR	Unemployment Rate	11.1%	11.0%
	10:00am	USD	ISM Manufacturing PMI	52.1	53.5
Jul 3	3rd-6th	GBP	Halifax HPI m/m	-0.3%	0.5%
	4:30am	GBP	Construction PMI	53.1	54.4
	4:30am	GBP	Net Lending to Individuals m/m	1.1B	1.4B
	10:00am	USD	Factory Orders m/m	0.1%	-0.6%
Jul 4 Jul 5	4:00am	EUR	Final Services PMI	46.8	46.8
	4:30am	GBP	Services PMI	53.0	53.3
	5:00am	EUR	Retail Sales m/m	0.2%	-1.0%
	6:00am	EUR	German Factory Orders m/m	0.2%	-1.9%
	7:00am	GBP	Official Bank Rate	0.50%	0.50%
	7:45am	EUR	Minimum Bid Rate	0.75%	1.00%
	8:15am	USD	ADP Non-Farm Employment Change	101K	133K
	8:30am	USD	Unemployment Claims	385K	386K
	10:00am	USD	ISM Non-Manufacturing PMI	53.1	53.7
	11:00am	USD	Crude Oil Inventories		-0.1M
Jul 6	3:00am	CHF	Foreign Currency Reserves		303.8B
	3:15am	CHF	CPI m/m	-0.3%	0.0%
	4:30am	GBP	PPI Input m/m	-2.1%	-2.5%
	6:00am	EUR	German Industrial Production m/m	0.3%	-2.2%
	8:30am	USD	Non-Farm Employment Change	92K	69K
	8:30am	USD	Unemployment Rate	8.2%	8.2%

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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