EUR/USD Fundamental Analysis July 9, 2012, Forecast

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Analysis and Recommendations:

The EUR/USD continues to fall, threatening to break through the 1.23 price level. The euro began to tumble yesterday, after negative comments from the ECB President and has continued throughout the day. After a poor jobs report in the US, markets would have expected to see the USD decline, but the report was sufficiently poor, to force the Fed to action, so the markets are now hoping to see a new round of quantitative easing from the Feds. Keep an eye out for Mr. Bernanke. The euro at this time is trading at 1.2315

IMF chief Christine Lagarde said that the IMF’s forecast of 3.5%growth for global GDP in 2012 will be trimmed back. She said “It is not an enormous variation, but it will be negative.” Equity markets have already done much to trim back their own growth expectations. While most major equity indices are positive for the year, almost all have posted negative returns over the past 3 months.

German industrial production data improved in May, with production increasing by 1.6% in May (-2.1% in April) with construction leading the way (+3.1%). Manufacturing increased by 1.8%. Energy output was negative (-1.6%) but that was probably due to lower energy prices – not necessarily a negative.

Markets failed to rejuvenate following a series of central bank actions yesterday, raising fresh concerns over, the evening session is likely to be dominated by sequence of numbers highlighting the state of the labor market in the world’s largest economy. The recent action by the Chinese central bank to cut its rate for the second time in less than few weeks is calling for a ground reality that a hard landing could become inevitable. In regards to crude oil prices, the events transpiring in Norway and Iran would be zealously watched for, as price action off-late has been driven by the mentioned countries. Overall, the week has remained captive to US economic data and developments out of Europe.

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 Reports for July 6, 2012 actual v. forecast

Date

 

Currency

   

 

Event

Actual

 

Forecast

 

Previous

 

 

Jul. 06

 

UAH

 

 

 

Ukrainian CPI (MoM) 

 

 

 

 

 

 

 

 

 

CHF

 

 

 

CPI (MoM) 

-0.3%

 

-0.3% 

 

0.0% 

 

 

 

 

GBP

 

 

 

PPI Input (MoM) 

-2.2%

 

-2.1% 

 

-2.6% 

   

 

 

GBP

 

 

 

PPI Input (YoY) 

-2.3%

 

-2.1% 

 

0.1% 

 

 

 

 

EUR

 

 

 

German Industrial Production (MoM) 

1.6%

 

0.1% 

 

-2.1% 

   

 

 

BRL

 

 

 

Brazilian CPI (YoY) 

4.92%

 

4.95% 

 

4.99% 

 

 

 

 

USD

 

 

 

Average Hourly Earnings (MoM) 

0.3%

 

0.2% 

 

0.2% 

   

 

 

CAD

 

 

 

Building Permits (MoM) 

7.4%

 

1.0% 

 

-4.4% 

   

 

 

CAD

 

 

 

Employment Change 

7.3K

 

5.0K 

 

7.7K 

 

 

 

 

USD

 

 

 

Nonfarm Payrolls 

80K

 

90K 

 

77K 

   

 

 

USD

 

 

 

Unemployment Rate 

8.2%

 

8.2% 

 

8.2% 

 

 

 

 

CAD

 

 

 

Unemployment Rate 

7.2%

 

7.0% 

 

7.3% 

 

 

 

 

USD

 

 

 

Average Weekly Hours 

34.5

 

34.4 

 

34.4 

 

 

 

 

USD

 

 

 

Private Nonfarm Payrolls 

84K

 

102K 

 

105K 

   

 

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

Date

Time

Currency

 Event

Previous

Jul 9

8:00

EUR

Sentix Investor Confidence

-28.9

23:01

GBP

BRC Retail Sales Monitor y/y

1.3%

23:01

GBP

RICS House Price Balance

-16%

Jul 10

6:45

EUR

French Industrial Production m/m

1.5%

8:30

GBP

Manufacturing Production m/m

-0.7%

8:30

GBP

Trade Balance

-10.1B

14:00

GBP

NIESR GDP Estimate

0.1%

Jul 11

12:30

USD

Trade Balance

-50.1B

14:30

USD

Crude Oil Inventories

-4.3M

Jul 12

9:00

EUR

Industrial Production m/m

-0.8%

12:30

USD

Unemployment Claims

 

12:30

USD

Import Prices m/m

-1.0%

18:00

USD

Federal Budget Balance

-124.6B

7:15

CHF

PPI m/m

-0.2%

Jul 13

12:30

USD

PPI m/m

-1.0%

13:55

USD

Prelim UoM Consumer Sentiment

73.2

Government Bond Auctions

Date  Time  Country 

Jul 09  15:30  Italy

Jul 10  00:30  Japan

Jul 10  08:30  Holland

Jul 10  09:10  Greece 

Jul 10  09:30  UK

Jul 10  14:30  UK

Jul 10  15:30  Italy

Jul 10  17:00  US

Jul 11  09:30  Germany

Jul 11  09:30  Swiss

Jul 11  17:00  US

Jul 12  09:10  Italy

Jul 12  09:30  UK

Jul 12  15:00  US

Jul 12  17:00  US

Jul 13  09:10  Italy

Jul 13  10:00  Belgium

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