EUR/GBP Weekly Fundamental Analysis October 22-26, 2012 Forecast

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EUR/GBP Weekly Fundamental Analysis October 22-26, 2012 Forecast

EUR/GBP Weekly Fundamental Analysis October 22-26, 2012 Forecast

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 Eurozone and UK

 

Weekly Analysis and Recommendations

The EUR/GBP is trading at 0.8136 up from its opening on Monday of 0.8055. The euro gained all week, on hopes for some resolve from the EU Summit. Even strong eco data in the UK with jobs and retail sales reporting well above forecast, could not trump the strength of the euro leading into the Summit. Markets were sure Spain would request a bailout and Greece would be resolved. When the Minister’s departed the Summit outside of moving forward on banking supervisor little else in the near term seemed to be accomplished.

Date

Last

Open

High

Low

Change %

Oct 19, 2012

0.8136

0.8140

0.8147

0.8122

-0.05%

Oct 18, 2012

0.8140

0.8126

0.8147

0.8110

0.17%

Oct 17, 2012

0.8126

0.8127

0.8130

0.8108

-0.01%

Oct 16, 2012

0.8127

0.8064

0.8137

0.8062

0.78%

Oct 15, 2012

0.8064

0.8055

0.8078

0.8040

0.10%

The GBP remained weak as the BoE is expected to inject additional stimulus this week, reducing the value of the pound. Also 3rd quarter GDP is due. The big event for this pair will be Mr. Draghi’s speech on Tuesday.

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 October 15-19, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Oct. 15

GBP

Rightmove House Price Index (MoM) 

3.5%

 

-0.6%

 

CHF

PPI (MoM) 

0.3%

0.2%

0.5%

 

USD

Core Retail Sales (MoM) 

1.1%

0.6%

1.0%

 

USD

Retail Sales (MoM) 

1.1%

0.8%

1.2%

 

USD

NY Empire State Manufacturing Index 

-6.2

-4.5

-10.4

Oct. 16

GBP

Core CPI (YoY) 

2.1%

2.1%

2.1%

 

GBP

CPI (YoY) 

2.2%

2.2%

2.5%

 

GBP

PPI Input (MoM) 

-0.2%

-0.1%

1.9%

 

GBP

CPI (MoM) 

0.4%

0.4%

0.5%

 

GBP

PPI Input (YoY) 

-1.2%

-0.8%

1.1%

 

EUR

CPI (YoY) 

2.6%

2.7%

2.7%

 

EUR

German ZEW Economic Sentiment 

-11.5

-15.0

-18.2

 

EUR

ZEW Economic Sentiment 

-1.4

-1.1

-3.8

 

EUR

Core CPI (YoY) 

1.5%

1.6%

1.5%

 

USD

Core CPI (MoM) 

0.1%

0.2%

0.1%

 

USD

CPI (MoM) 

0.6%

0.5%

0.6%

 

USD

CPI (YoY) 

2.0%

1.9%

1.7%

 

USD

Core CPI (YoY) 

2.0%

2.0%

1.9%

 

USD

TIC Net Long-Term Transactions 

90.0B

45.3B

67.2B

 

USD

Industrial Production (MoM) 

0.4%

0.2%

-1.4%

Oct. 17

GBP

Average Earnings Index +Bonus 

1.7%

1.6%

1.6%

 

GBP

Claimant Count Change 

-4.0K

-1.0K

-14.2K

 

USD

Building Permits 

0.894M

0.810M

0.801M

 

USD

Housing Starts 

0.872M

0.770M

0.758M

 Oct. 18

GBP

Retail Sales (MoM) 

0.6%

0.4%

-0.1%

 

GBP

Retail Sales (YoY) 

2.5%

2.1%

2.5%

 

EUR

Spanish 10-Year Obligation Auction 

5.458%

 

5.666%

 

USD

Initial Jobless Claims 

388K

365K

342K

 

USD

Continuing Jobless Claims 

3252K

3275K

3281K

 

USD

Philadelphia Fed Manufacturing Index 

5.7

1.0

-1.9

Oct. 19 

USD

Existing Home Sales 

4.75M

4.75M

4.83M

Historical: From 2010 to Present

Highest: 0.9150 EUR on March 01, 2010.

Average: 1.1548 EUR over this period.

Lowest: 0.7758 EUR on July 22, 2012

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 24 

07:58

EUR

French Manufacturing PMI 

44.0 

42.7 

 

08:28

EUR

German Manufacturing PMI 

48.0 

47.4 

 

09:00

EUR

German Ifo Business Climate Index 

101.6 

101.4 

 

09:00

EUR

German Current Assessment 

109.7 

110.3 

 

09:00

EUR

German Business Expectations 

94.3 

93.2 

 

11:00

GBP

CBI Industrial Trends Orders 

 

-8 

 

15:00

USD

New Home Sales

385K

373K

Oct.26 

07:00

EUR

GfK German Consumer Climate 

5.9 

5.9 

 

08:00

CHF

KOF Leading Indicators 

1.67 

1.67 

Government Bond Auction

Date Time Country 

Oct 22 09:10 Norway 

Oct 23 08:30 Spain 

Oct 23 14:30 UK 

Oct 23 17:00 US 

Oct 24 09:10 Sweden 

Oct 24 09:30 Germany 

Oct 24 14:30 Sweden 

Oct 24 15:30 Italy  

Oct 24 16:30 US 

Oct 25 00:30 Japan 

Oct 25 09:10 Sweden 

Oct 25 15:30 Italy  

Oct 25 17:00 US 

Oct 26 09:10 Italy

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