EUR/USD Fundamental Analysis July 18, 2012, Forecast

Get Forex buy/sell signals directly to your email and by SMS.
To learn more click here

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 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

GBP

 

 

 

BoE Gov King Speaks 

 

 

 

 

 

 

 

 

 

USD

 

 

 

Core CPI (MoM) 

0.2%

 

0.2% 

 

0.2% 

 

 

 

 

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% 

 

 

 

 

USD

 

 

 

Core CPI (YoY) 

2.2%

 

2.2% 

 

2.3% 

 

 

 

 

CAD

 

 

 

Interest Rate Decision 

1.00%

 

1.00% 

 

1.00% 

 

 

 

 

USD

 

 

 

TIC Net Long-Term Transactions 

55.0B

 

45.7B 

 

27.2B 

  

 

 

USD

 

 

 

Industrial Production (MoM) 

0.4%

 

0.3% 

 

-0.2% 

  

 

 

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

Claimant Count Change

8.1K

8:30

GBP

Unemployment Rate

8.2%

9:00

CHF

ZEW Economic Expectations

-43.4

12:30

USD

Building Permits

0.78M

12:30

USD

Housing Starts

0.71M

14:30

USD

Crude Oil Inventories

-4.7M

Jul 19

6:00

CHF

Trade Balance

2.48B

8:00

EUR

Current Account

4.6B

8:30

GBP

Retail Sales m/m

1.4%

12:30

USD

Unemployment Claims

 

14:00

USD

Existing Home Sales

4.55M

14:00

USD

Philly Fed Manufacturing Index

-16.6

Jul 20

6:00

EUR

German PPI m/m

-0.3%

8:30

GBP

Public Sector Net Borrowing

15.6B

 

Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
 
We value your privacy. Your e-mail address will not be shared.
About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

  View all of FX Empire Analyst - Barry Norman's Articles    
Share Your Thoughts: Post a Comment


Your email address will not be published.