EUR/USD Fundamental Analysis July 18, 2012, Forecast
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Analysis and Recommendations:
The EUR/USD bounced around from lows early in the morning to highs in the early afternoon prior as investors positioned themselves ahead of Bernanke’s testimony. New flow was at a minimal today and little eco data. The other main event was the Germany ZEW releases which were slightly better than expected but more or less in line with expectations. The same held true for CPI in the US. The euro is trading at 1.2225 after the early release of the Fed’s statement.
Fed Chief Bernanke today sketched out for members of Congress the weaker economic outlook, and stressed that the central bank is prepared to take further action to try to give the recovery a jolt. In testimony prepared for the Senate Banking Committee as part of his twice-per-year report on Fed monetary policy issues, Bernanke said that the reduction in the unemployment rate in coming months seems likely to be “frustratingly slow.” Bernanke urged Congress to move right away to address the looming fiscal cliff, saying it threatened the recovery. He said that the European debt crisis was also a significant threat. The Fed chairman gave no indication outside of what was provided in the June FOMC minutes of any action or consideration, disappointing markets.
There are two major global themes that are driving markets; the path ahead for Europe and the outlook for global growth, followed by ongoing deceleration in inflationary pressures opening the door for central banks to react. Global growth is decelerating, highlighted most recently by yesterday’s IMF outlook update. The path ahead for Europe remains complicated and volatile. What matters now is the reaction of central banks, with many having chosen to loosen policy further (PBoC, ECB and BoE).
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 Reported on July 17, 2012 actual v. forecast
|
Date |
|
Currency |
|
|
Event |
Actual |
|
Forecast |
|
Previous |
|
|
|
|
Jul. 17 |
|
AUD |
|
|
Monetary Policy Meeting Minutes |
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|
|
|
|
|
||
|
|
|
GBP |
|
|
Core CPI (YoY) |
2.1% |
|
2.3% |
|
2.2% |
|
||
|
|
|
GBP |
|
|
CPI (YoY) |
2.4% |
|
2.8% |
|
2.8% |
|
||
|
|
|
GBP |
|
|
CPI (MoM) |
-0.4% |
|
-0.1% |
|
-0.1% |
|
||
|
|
|
EUR |
|
|
German ZEW Economic Sentiment |
-19.6 |
|
-20.0 |
|
-16.9 |
|
||
|
|
|
EUR |
|
|
ZEW Economic Sentiment |
-22.3 |
|
-28.0 |
|
-20.1 |
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||
|
|
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GBP |
|
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BoE Gov King Speaks |
|
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|
|
|
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||
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|
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USD |
|
|
Core CPI (MoM) |
0.2% |
|
0.2% |
|
0.2% |
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||
|
|
|
USD |
|
|
CPI (MoM) |
0.0% |
|
-0.1% |
|
-0.3% |
|
||
|
|
|
CAD |
|
|
Manufacturing Sales (MoM) |
-0.40% |
|
1.00% |
|
-1.10% |
|||
|
|
|
USD |
|
|
CPI (YoY) |
1.7% |
|
1.6% |
|
1.7% |
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||
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|
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USD |
|
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Core CPI (YoY) |
2.2% |
|
2.2% |
|
2.3% |
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||
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|
|
CAD |
|
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Interest Rate Decision |
1.00% |
|
1.00% |
|
1.00% |
|
||
|
|
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USD |
|
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TIC Net Long-Term Transactions |
55.0B |
|
45.7B |
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27.2B |
|||
|
|
|
USD |
|
|
Industrial Production (MoM) |
0.4% |
|
0.3% |
|
-0.2% |
|||
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USD |
|
|
Fed Chairman Bernanke Testifies |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jul 18 |
8:30 |
GBP |
8.1K |
|
|
8:30 |
GBP |
8.2% |
||
|
9:00 |
CHF |
-43.4 |
||
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12:30 |
USD |
0.78M |
||
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12:30 |
USD |
0.71M |
||
|
14:30 |
USD |
-4.7M |
||
|
Jul 19 |
6:00 |
CHF |
2.48B |
|
|
8:00 |
EUR |
4.6B |
||
|
8:30 |
GBP |
1.4% |
||
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12:30 |
USD |
|||
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14:00 |
USD |
4.55M |
||
|
14:00 |
USD |
-16.6 |
||
|
Jul 20 |
6:00 |
EUR |
-0.3% |
|
|
8:30 |
GBP |
15.6B |
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