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

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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

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

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