EUR/USD Fundamental Analysis August 6, 2012, Forecast

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Analysis and Recommendations:

The EUR/USD is trading at 1.2268 moving up a few pips after the US nonfarm payroll release. Today’s report showed the US created 163K new jobs, when it was forecast at 100K.

The euro is stronger, and up 0.8% as it retraces yesterday’s decline and is supported by a general improvement in data given stronger services PMIs and better than expected retail sales for the euro area.  Both Germany and the euro area’s services PMIs improved from the July 24th advance, coming in at 50.3 and 47.9, respectively.  However, the euro has remained on a downward trend over the course of the week, and today’s rally has yet to retrace Wednesday’s open.

Despite a considerable amount of data, event, and headline risk vying for dominance, this week’s largest moves in FX occurred over the course of two central bank events.  While both the Fed and the ECB garnered a considerable amount of attention, and both generated overall weakness in the majors vs the USD, the relative declines seen over the course of the ECB press conference were by far the greatest.  The reaction was largely the result of expectations vs outcome, as comments made by President Draghi a week ahead of the ECB meeting had raised hopes for forceful action.  The lack of follow through, with credible action, left markets disappointed.  Despite hopes for action on August 1st from the FOMC, the disappointment was of a lesser degree.

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 2, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 03

 

TRY

 

 

 

Turkish CPI (MoM) 

-0.23%

 

-0.10% 

 

-0.90% 

 

 

 

 

EUR

 

 

 

Retail Sales (MoM) 

0.1%

 

-0.1% 

 

0.8% 

   

 

 

USD

 

 

 

Average Hourly Earnings (MoM) 

0.1%

 

0.2% 

 

0.3% 

 

 

 

 

USD

 

 

 

Nonfarm Payrolls 

163K

 

100K 

 

64K 

   

 

 

USD

 

 

 

Unemployment Rate 

8.3%

 

8.2% 

 

8.2% 

 

 

 

 

USD

 

 

 

Average Weekly Hours 

34.5

 

34.5 

 

34.5 

 

 

 

 

USD

 

 

 

Private Nonfarm Payrolls 

172K

 

110K 

 

73K 

   

 

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

Date

Time

Currency

Event 

Previous

Aug 6

8:30

EUR

Sentix Investor Confidence

-29.6

 

23:01

GBP

BRC Retail Sales Monitor y/y

1.4%

Aug 7

7:00

CHF

Foreign Currency Reserves

364.9B

 

7:15

CHF

CPI m/m

-0.3%

 

8:00

EUR

Italian Industrial Production m/m

0.8%

 

8:30

GBP

Manufacturing Production m/m

1.2%

 

10:00

EUR

German Factory Orders m/m

0.6%

 

14:00

GBP

NIESR GDP Estimate

-0.2%

Aug 8

5:45

CHF

SECO Consumer Climate

-8

 

9:30

GBP

BOE Inflation Report

 
 

10:00

EUR

German Industrial Production m/m

1.6%

 

12:30

USD

Prelim Nonfarm Productivity q/q

-0.9%

 

12:30

USD

Prelim Unit Labor Costs q/q

1.3%

 

14:30

USD

Crude Oil Inventories

 

Aug 9

8:00

EUR

ECB Monthly Bulletin

 
 

8:30

GBP

Trade Balance

-8.4B

 

12:30

USD

Trade Balance

-48.7B

 

12:30

USD

Unemployment Claims

 

Aug 10

6:45

EUR

French Industrial Production m/m

-1.9%

 

8:30

GBP

PPI Input m/m

-2.2%

 

12:30

USD

Import Prices m/m

-2.7%

 

18:00

USD

Federal Budget Balance

-59.7B

Government Bond Auctions

Date  Time  Country 

Aug 06  09:10  Norway

Aug 07  00:30  Japan

Aug 07  09:15  Austria

Aug 07  14:30  UK

Aug 07  17:00  US

Aug 08  09:30  Germany

Aug 08  10:00  Norway

Aug 08  15:30  Italy

Aug 08  17:00  US

Aug 09  15:30  Italy

Aug 09  17:00  US

Aug 10  10:00  Belgium

Aug 13  09:10  Italy

Aug 13  09:10  Norway

Aug 13  09:30  Germany

Aug 14  09:10  Greece 

Aug 14  09:10  Italy

Aug 14  09:30  Belgium

Aug 14  14:30  UK

Aug 15  09:10  Sweden

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About: FX Empire Analyst - Barry Norman

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