EUR/USD Fundamental Analysis October 12, 2012 Forecast

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EUR/USD Fundamental Analysis October 12, 2012 Forecast

EUR/USD Fundamental Analysis October 12, 2012 Forecast

Analysis and Recommendations:

The EUR/USD rose to 1.2925 adding 50 pips on positive eco data in the US. Jobs data released today, supports the numbers from last Friday’s nonfarm report, showing a drop in unemployment claims.

Thursday morning the Euro had recovered its losses on Wednesday and the dollar index had pulled back. The S&P move was a bit surprising to the market place, but not really a significant shocker to change the overall perception of Spain’s financial condition or the overall EU debt crisis. That notion was reinforced by a fairly well-subscribed Italian government bond auction on Thursday. However, the S&P downgrade did bolster ideas Spain will seek further bailout funds from the EU sooner rather than later.

Traders are in search of more risk as they leave the safety of the USD and the JPY. For the first time in 4‐sessions, traders are adding risk into portfolios. There has not been a single catalyst; however central bank policy remains the key focus with the Fed defending QE, Japan and Switzerland defending their stance on strong currencies, all helping to revive undertones of currency wars. Both Brazil and South Korea cut interest rates. The territorial dispute between Japan and China is still negative for sentiment and Japanese growth expectations; the Chinese delegations decision to cancel their participation at the IMF meetings is a further complication. The IMF meetings generally seem to be supporting austerity but at a more moderate pace.

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 October 11, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

Forecast

Previous

Oct. 11

 

JPY

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

AUD

 

 

Employment Change 

14.5K

3.8K 

-9.1K 

 

 

AUD

 

 

Unemployment Rate 

5.4%

5.3% 

5.1% 

 

 

KRW

 

 

South Korean Interest Rate Decision 

2.75%

2.75% 

3.00% 

 

 

EUR

 

 

German CPI (MoM) 

0.0%

0.0% 

0.4% 

 

 

EUR

 

 

German CPI (YoY) 

2.0%

2.0% 

2.1% 

 

 

INR

 

 

Indian Trade Balance 

-18.1B

 

-15.6B 

 

 

EUR

 

 

French CPI (MoM) 

-0.3%

0.1% 

0.7% 

 

 

HUF

 

 

Hungarian CPI (YoY) 

6.6%

6.4% 

6.0% 

 

 

SEK

 

 

Swedish CPI (YoY) 

0.4%

0.7% 

0.7% 

 

 

EUR

 

 

ECB Monthly Report 

 

 

 

 

 

USD

 

 

Import Price Index (MoM) 

1.1%

0.7% 

1.1% 

 

 

CAD

 

 

Trade Balance 

-1.3B

-2.0B 

-2.5B 

 

 

USD

 

 

Trade Balance 

-44.2B

-44.0B 

-42.5B 

 

 

USD

 

 

Initial Jobless Claims 

339K

370K 

369K 

 

 

USD

 

 

Continuing Jobless Claims 

3273K

3275K 

3288K 

 

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

Date

Time

Currency

Event

Forecast

Previous

 Oct. 12

10:00

EUR

Industrial Production (MoM) 

-0.4% 

0.6% 

 

13:30

USD

Core PPI (MoM) 

0.2% 

0.2% 

 

13:30

USD

PPI (MoM) 

0.8% 

1.7% 

 

14:55

USD

Michigan Consumer Sentiment 

77.9 

78.3 

Government Bond Auction

Date Time Country 

Oct 12 09:30 Germany 

Oct 12 10:00 Belgium

 

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About: FX Empire Analyst - Barry Norman

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