EUR/USD Fundamental Analysis July 13, 2012, Forecast

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Analysis and Recommendations:

The EUR/USD is trading at 1.2184 and remains weak. Although EU Ministers met again today, most did not show sending deputies and ambassadors in their places. With little movement forward as the ESM is held in German courts, there isn’t much progress to be made.

The US unemployment report was the main focus today and it reported fairly close to the estimates, with new claims failing slightly and continuing claims just about on the money. The report only strengthened an already powerful USD.

Interplay of accelerating concern toward global growth prospects and market impatience for stronger QE3 signals from the Fed explains another risk-off move in global markets this morning. Spanish 10s backed up with the yield rising to 6.6% (+10bps) and Italian 10s also retraced earlier gains and are currently yielding 5.86% at the time of writing.  Currency markets are also closely aligned with the global trade.  The USD is stronger against virtually all major currency crosses overnight and into this morning.  This is largely on market impatience regarding additional Fed stimulus, but with some regional twists explained.

Market sentiments remained in the doldrums on a bleak global economic outlook. Investors flocked away from riskier assets as the minutes from the FOMC meeting released the previous day hardly provided any cues on another round of monetary easing by the US Federal Reserve. The Dollar gained while commodities and equities declined following uncertainty over probable stimulus measures.  Spot gold slipped, dropping more than 0.5 percent after showing a mild recovery in the previous session. Dollar trading firm near its two year high against a basket of currencies took the sheen out of precious metal.

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 July 13, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

Jul. 12

 

AUD

 

 

 

RBA Assist Gov Lowe Speaks 

 

 

 

 

 

 

 

KRW

 

 

 

South Korean Interest Rate Decision 

3.00%

 

3.25% 

 

3.25% 

 

 

AUD

 

 

 

Employment Change 

-27.0K

 

0.3K 

 

27.9K 

 

 

AUD

 

 

 

Unemployment Rate 

5.2%

 

5.2% 

 

5.1% 

 

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

EUR

 

 

 

French CPI (MoM) 

0.0%

 

-0.1% 

 

-0.1% 

 

 

JPY

 

 

 

BoJ Press Conference 

 

 

 

 

 

 

 

EUR

 

 

 

Industrial Production (MoM) 

0.6%

 

-0.1% 

 

-1.1% 

 

 

USD

 

 

 

Import Price Index (MoM) 

-2.7% 

 

-1.7% 

 

-1.0% 

 

 

USD

 

 

 

Initial Jobless Claims 

350K 

 

372K 

 

374K 

 

 

USD

 

 

 

Continuing Jobless Claims 

3304 

 

3300K 

 

3306K 

 

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

Date

Time

Currency

 Event

Previous

Jul 13

12:30

USD

PPI m/m

-1.0%

13:55

USD

Prelim UoM Consumer Sentiment

73.2

 

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About: FX Empire Analyst - Barry Norman

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