EUR/JPY Fundamental Forecast – May 20, 2016

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Published: May 19, 2016, 03:36 UTC

The EUR/JPY dipped 12 points to 123.49 supported by Wednesday’s better than expected GDP and the declining euro. The faster than expected pace of growth

EUR/JPY Fundamental Forecast – May 20, 2016

The EUR/JPY dipped 12 points to 123.49 supported by Wednesday’s better than expected GDP and the declining euro. The faster than expected pace of growth suggests the Japanese economy is managing to shake off the effects of a slowdown in China and a stronger yen — at least for now — with domestic demand having more momentum than previously thought. (Financial Times)

The growth data will give heart to the Bank of Japan — suggesting the economy is growing faster than its long-run trend of about 0.5 per cent — although it is unlikely to have much direct effect on monetary policy. The BoJ is still under pressure to ease because of the rising yen and the weakness of inflation.

Eurostat revealed that annual inflation in both the Euro area and European Union (EU) was -0.2% in April, down from 0% in March. Ahead of the data, the euro traded mixed against its major rivals. While the euro held steady against the Japanese yen, it dropped against the greenback, pound and the franc.

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Upcoming Economic Events that you should be monitoring:

Friday, May 20, 2016

Cur.	Event	Actual	Forecast	Previous
GBP	CBI Industrial Trends Orders (May)		-13	-11
CAD	Core CPI (YoY) (Apr)		2.0%	2.1%
CAD	Core CPI (MoM) (Apr)		0.1%	0.7%
CAD	Core Retail Sales (MoM) (Mar)		-0.4%	0.2%
CAD	CPI (MoM) (Apr)		0.3%	0.6%
CAD	Retail Sales (MoM) (Mar)		-0.6%	0.4%
USD	FOMC Member Tarullo Speaks
USD	Existing Home Sales (MoM) (Apr)		1.3%	5.1%
USD	Existing Home Sales (Apr)		5.40M	5.33M
USD	Baker Hughes U.S. Rig Count			318