EUR/USD Fundamental Analysis October 19, 2012 Forecast

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Analysis and Recommendations:

The EUR/USD fell back up the 1.31 price to trade at1.3096 dipping 26pips as markets eagerly await news from the EU Summit. European Union leaders gather in Brussels for two days starting today, where Greek Prime Minister Antonis Samaras prepares to argue for a two-year extension to meet the country’s bailout targets. French President Francois Hollande says efforts to stem the turmoil that began in Greece could unravel if the EU fails to deliver on its promises. The euro fell for the first day in three against the US dollar, declining 0.3 per cent.

Markets are not sure what to expect from Spain but it will be disastrous for the euro if Spain does not officially request assistance.  Falling Spanish bond yields this week, amid good demand at their debt auctions, hint that Spanish officials may not be in a hurry to seek financial assistance from the EU.

A slew of economic indicators from China released earlier today have bolstered optimism, subsiding worries over economic growth. Even as the Chinese economic growth slowed down for the seventh successive quarter, the GDP number was in line with expectation of 7.4 percent. Meanwhile, industrial production and retail sales in September rose 9.2 and 14.2 per cent respectively on a year on year basis, exceeding expectation, quelling worries over a hard landing. 

The Summit will be the fourth on this year and the leaders are expecting to make headway in the banking union plan and also a decision on Spain and Greece. However, major progress is hardly anticipated. Over the other side of Atlantic, initial jobless claims were mixed and confusing as new claims reported above forecast and continuing claims fell below forecast. 

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 18, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Oct. 18

 

AUD

 

 

NAB Quarterly Business Confidence 

-2.00

 

 

 

-2.00 

 

 

 

 

CNY

 

 

Chinese Fixed Asset Investment (YoY) 

20.5%

 

20.2% 

 

20.2% 

 

 

 

 

CNY

 

 

Chinese GDP (YoY) 

7.4%

 

7.4% 

 

7.6% 

 

 

 

 

CNY

 

 

Chinese Industrial Production (YoY) 

9.2%

 

9.0% 

 

8.9% 

 

 

 

 

CNY

 

 

Chinese Retail Sales (YoY) 

14.2%

 

13.2% 

 

13.2% 

 

 

 

 

GBP

 

 

Retail Sales (MoM) 

0.6%

 

0.4% 

 

-0.1% 

   

 

 

GBP

 

 

Retail Sales (YoY) 

2.5%

 

2.1% 

 

2.5% 

   

 

 

EUR

 

 

Spanish 10-Year Obligacion Auction 

5.458%

 

 

 

5.666% 

 

 

 

 

USD

 

 

Initial Jobless Claims 

388K

 

365K 

 

342K 

   

 

 

CAD

 

 

Wholesale Sales (MoM) 

0.5%

 

0.2% 

 

-0.7% 

   

 

 

USD

 

 

Continuing Jobless Claims 

3252K

 

3275K 

 

3281K 

   

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 19 

15:00

USD

Existing Home Sales 

4.73M 

4.82M 

Government Bond Auction

Date Time Country 

Oct 21 10:30 Portugal 

Oct 22 09:10 Norway 

Oct 23 08:30 Spain 

Oct 23 14:30 UK 

Oct 23 17:00 US 

Oct 24 09:10 Sweden 

Oct 24 09:30 Germany 

Oct 24 14:30 Sweden 

Oct 24 15:30 Italy  

Oct 24 16:30 US 

Oct 25 00:30 Japan 

Oct 25 09:10 Sweden 

Oct 25 15:30 Italy  

Oct 25 17:00 US 

Oct 26 09:10 Italy

 

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About: FX Empire Analyst - Barry Norman

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