EUR/USD Fundamental Analysis March 7, 2012, Forecast

By FX Empire Analyst - Barry Norman
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Analysis and Recommendations:

The EUR/USD has fallen most of the day, trading now at 1.3123 down from 1.3226. Investors were not able to shake off the dismal feeling about the overall eurozone recovery, with less of a distraction with Greece more or less settled, the markets have been able to turn back to take a look at the overall economy. Although today rumors stirred the markets over last minute problems with the Greek PSI swap, but the rumors were quickly turned off.

Major Greek bondholders announced their support for a deal that will deeply cut the value of their holdings as their contribution to keeping the country afloat. The steering committee of creditors, which includes 12 major investors in Greek bonds and was involved in drawing up last month’s landmark deal, said it would accept the bond swap offer.

EU’s Rehn: Eurozone Currently in a Mild Recession but Signs of Improvement but, risk of credit crunch in European economy has been prevented largely due to long-term liquidity offer of ECB. The Commission supports combining remaining resources of EFSF with ESM to make sturdier European firewall.

Eurozone GDP tallied at forecast. Nothing worth noting in today’s release.


March 6, 2012 Economic Releases actual v. forecast






Current Account 













Interest Rate Decision 













Halifax House Price Index (MoM) 













GDP (QoQ) 













Ivey PMI 








Scheduled Economic Events for March 7, 2012 (GMT)

06:45     CHF        Unemployment Rate                                     3.1%                      3.1%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month.

A higher than expected reading should be taken as negative/bearish for the CHF, while a lower than expected reading should be taken as positive/bullish for the CHF.               

11:00     EUR       German Factory Orders (MoM)                 0.6%                      1.7%

German Factory Orders measures the change in the total value of new purchase orders placed with manufacturers for both durable and non-durable goods. It is a leading indicator of production.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

13:15     USD      ADP Nonfarm Employment                        205K                      170K                     

 13:30    USD      Nonfarm Productivity (QoQ)                      0.8%                      0.7%                     

 13:30    USD       Unit Labor Costs (QoQ)                             1.2%                      1.2%

The ADP National Employment Report is a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients. The release, two days ahead of government data, is a good predictor of the government's non-farm payroll report. The change in this indicator can be very volatile.

Nonfarm Productivity measures the annualized change in labor efficiency when producing goods and services, excluding the farming industry. Productivity and labor-related inflation are directly linked-a drop in a worker's productivity is equivalent to a rise in their wage.

Unit Labor Costs measure the annualized change in the price businesses pay for labor, excluding the farming industry. It is a leading indicator of consumer inflation.

20:00     NZD      Interest Rate Decision                                2.50%                    2.50%                   

 20:00    NZD      RBNZ Rate Statement                                                                                                  

 20:00    NZD       RBNZ Monetary Statement          

The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.           

The Reserve Bank of New Zealand's (RBNZ) quarterly Monetary Policy Statement outlines how the bank will achieve its inflation targets, how it proposes to formulate and implement monetary policy during the next five years and how monetary policy has been implemented since the last statement's release.                                                        

 23:50    JPY        GDP (QoQ)                                                     -0.2%                     -0.6%                    

23:50     JPY        GDP Price Index (YoY)                                -1.6%                     -1.6%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health.

Sovereign Bond Auction Schedule

Mar 07  10:10  Sweden  Nominal bond auction

Mar 07  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Mar 07  10.30  UK  Auctions new Sep 2017 conventional Gilt

Mar 08  16:00  US Announces auctions of 3Y Notes on Mar 12, 10Y Notes on Mar 13 & 30Y Bonds on Mar 14

Mar 08  16:30  Italy   Details BOT auction on Mar 13

Mar 09  11:00  Belgium  OLO mini bond auction

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