EUR/USD Fundamental Analysis October 24, 2012 Forecast

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By FX Empire Analyst - Barry Norman
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Analysis and Recommendations:

The EUR/USD tumbled today, to trade at 1.2962 down 0.4%. At the close of the US session, Moody’s downgraded five Spanish regions (including Catalonia) and confirmed five others; however the shift lower in EURUSD came well into the Asian session and likely on the back of EURJPY selling, disappointing European earnings, France’s disappointing business confidence (falling to a multiyear low of 85), rumors about who will lead the Fed in January 2013 and upward pressure on Spanish yields for the third session.  The central bank of Spain released its estimate for Q3 GDP at -0.4% q/q, the silver lining in this estimate is that it is above the current consensus and is in line with the drop in Q2; however a failure on the part of PM Rajoy to request aid is beginning to weigh on markets. EUR has traded within a broad range since the FOMC’s decision to launch QE3 on September 13.

The FOMC began its two day meeting as traders will wait to see their assessment of the US economy. Also some of the QE introduced last month by the Fed was tied directly to unemployment and with the rate dropping to 7.8% as reported earlier this month, traders are not sure what the Fed might do.

Markets are shedding risk as rumors swirl that Chair Bernanke will not seek another term, yesterday’s US Presidential debate suggests President Obama came out ahead, weak earnings report from Europe combined with lower forecasts from the US corporate sector and some focus on geopolitical risks

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 23, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

Oct. 23

 

PLN

 

 

Polish Unemployment Rate 

12.40%

 

12.50%

 

12.40% 

 

 

GBP

 

 

BBA Mortgage Approvals 

31.2K

 

30.9K

 

30.7K 

 

 

CAD

 

 

Core Retail Sales (MoM) 

0.4%

 

0.2%

 

0.5% 

 

 

CAD

 

 

Retail Sales (MoM) 

0.3%

 

0.4%

 

0.7% 

 

 

CAD

 

 

Interest Rate Decision 

1.00%

 

1.00%

 

1.00% 

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 24 

07:58

EUR

French Manufacturing PMI 

44.0

42.7 

 

08:28

EUR

German Manufacturing PMI 

48.0

47.4 

 

09:00

EUR

German Ifo Business Climate Index 

101.6

101.4 

 

09:00

EUR

German Current Assessment 

109.7

110.3 

 

09:00

EUR

German Business Expectations 

94.3

93.2 

 

11:00

GBP

CBI Industrial Trends Orders 

 

-8 

 

15:00

USD

New Home Sales

385K

373K

Oct.26 

07:00

EUR

GfK German Consumer Climate 

5.9

5.9 

 

08:00

CHF

KOF Leading Indicators 

1.67

1.67 

Government Bond Auction

Date Time Country 

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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