EUR/USD Fundamental Analysis August 27, 2012, Forecast

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Analysis and Recommendations:

The EUR/USD declined today to trade at 1.2502 down 0.50%.

More broadly speaking, all of the classic safe havens are rallying today including US, Canadian, German, French and UK 10s.  Spanish and Italian 10s are selling off.  This risk adverse bias is being matched by USD strength as most of the majors sell off against the USD with the exception of SEK and a largely flat CAD.  Commodity markets are putting gentle downward pressure on gold and other precious metals as well as crude, while agricultural commodities generally rally.

German Chancellor Angela Merkel and Greek Prime Minister Antonis Samaras are holding a press conference as we type this morning and so far Merkel has reinforced the point that Greece should not expect a significant bending of the terms in the original MoU that governed conditions for assistance and reinforced that yesterday afternoon.  She has also downplayed expectations for any near term pronouncements as opposed to waiting for the troika report that will likely land by the end of September although estimates of when are all over the map.  Merkel noted that she expects Greece to stick to its commitments and follow its promises, but that Germany will help Greece where it’s asked for help.  It’s not immediately clear what this somewhat inconsistent messaging means other than to reinforce that Merkel will wait until the troika report to say much else.  Samaras remarked that Greece will honor its pledges.

Today’s strong US durable goods release might change some minds about the possibility of Fed stimulus after a week or so of fairly positive data. The countdown will begin soon. Monday, should be an active day as the end of European vacation season it here. The US on the other hand moves closer to its annual Labor Day beach holiday and most people combine this into a long weekend or weeks’ vacation, so US markets and news will be quiet after Wednesday.

There are two dates that market should watch for that is August 31-September 1 for the Economic Symposium in Jackson Hole followed on September 12-13 with the FOMC meeting

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 up to the data analysis and information in our weekly reports

Economic Data August 24, 2012 actual v. forecast 

Date

Time

 

Currency

 

Importance

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 24

00:30

 

AUD

 

 

 

RBA Governor Stevens Speaks 

 

 

 

 

 

 

 

 

09:30

 

GBP

 

 

 

Business Investment (QoQ) 

-1.5%

 

2.8% 

 

1.9% 

 

 

 

09:30

 

GBP

 

 

 

GDP (QoQ) 

-0.5%

 

-0.5% 

 

-0.7% 

 

 

 

09:30

 

GBP

 

 

 

GDP (YoY) 

-0.5%

 

-0.6% 

 

-0.8% 

 

 

 

13:30

 

USD

 

 

 

Core Durable Goods Orders (MoM) 

-0.4%

 

0.5% 

 

-2.2% 

  

 

13:30

 

USD

 

 

 

Durable Goods Orders (MoM) 

4.2%

 

2.4% 

 

1.6% 

  

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Previous

 Aug. 27

09:00

EUR

German Ifo Business Climate Index 

103.3 

 

09:00

EUR

German Current Assessment 

111.6 

 

09:00

EUR

German Business Expectations 

95.6 

Aug. 28

07:00

EUR

GfK German Consumer Climate 

5.9 

 

15:00

USD

CB Consumer Confidence 

65.9 

Aug. 29

01:00

EUR

German CPI (MoM) 

0.4% 

 

01:00

EUR

German CPI (YoY) 

1.7% 

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

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About:FX Empire Analyst - Barry Norman

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