EUR/GBP Weekly Fundamental Analysis – May 16-20, 2016 -Forecast

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Published: May 14, 2016, 05:35 UTC

The EUR/GBP dipped 0.42% to trade at 0.7870. The euro turned lower at the end of the week after the release of a lackluster GDP report. Seasonally

EUR/GBP Weekly Fundamental Analysis – May 16-20, 2016 -Forecast

The EUR/GBP dipped 0.42% to trade at 0.7870. The euro turned lower at the end of the week after the release of a lackluster GDP report. Seasonally adjusted GDP rose by 0.5% in both the euro area (EA19) and the EU28 during the first quarter of 2016, compared with the previous quarter, according to a flash estimate published by Eurostat, the statistical office of the European Union. In the fourth quarter of 2015, GDP grew by 0.3% and 0.4% respectively. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.5% in the euro area and by 1.7% in the EU28 in the first quarter of 2016, after +1.6% and +1.8% respectively in the previous quarter.

The pound was weighed down on comment from the BoE and its members after its monthly meeting on Thursday. “Sterling is also likely to depreciate further, perhaps sharply. This combination of influences … could lead to a materially lower path for growth and notably higher path for inflation,” the BoE said in its latest economic forecasts.

British voters have faced a raft of reports from the government and international bodies in recent weeks warning of the dangers of leaving, and the International Monetary Fund is expected to weigh in again on Friday.

Supporters of Brexit argue Britain would benefit from less European regulation, and could strike better overseas trade deals on its own.

Opinion polls show voters believe the economy would fare better if Britain stays in the EU, but remain roughly evenly split on how they plan to cast their ballot.

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:


	Cur.	Event	Actual	Forecast	Previous
Tuesday, May 17, 2016
	GBP	CPI (YoY) (Apr)		0.5%	0.5%
	USD	Building Permits (Apr)		1.130M	1.076M
	USD	Core CPI (MoM) (Apr)		0.2%	0.1%
Wednesday, May 18, 2016
	JPY	GDP (QoQ) (Q1)		0.1%	-0.3%
	GBP	Average Earnings Index +Bonus (Mar)		1.7%	1.8%
	GBP	Claimant Count Change (Apr)		4.0K	6.7K
	EUR	CPI (YoY) (Apr)		-0.2%	-0.2%
	USD	Crude Oil Inventories			-3.410M
Thursday, May 19, 2016
	AUD	Employment Change (Apr)		12.5K	26.1K
	GBP	Retail Sales (MoM) (Apr)		0.5%	-1.3%
	USD	Philadelphia Fed Manufacturing Index		3.5	-1.6
Friday, May 20, 2016
	CAD	Core CPI (MoM) (Apr)		0.1%	0.7%
	CAD	Core Retail Sales (MoM) (Mar)		-0.5%	0.2%
	USD	Existing Home Sales (Apr)		5.40M	5.33M