EUR/USD Fundamental Analysis October 3, 2012 Forecast

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Analysis and Recommendations:

The EUR/USD is trading at 1.2944 pretty close to its opening, in a tight range in the lower end of the 1.29 price level. The euro is slightly stronger, benefitting from lower Spanish bond yields (with the 10yr down to 5.70% ‐ see chart) as rumors circle that Spain is going request aid imminently. In addition, higher than expected Eurozone PPI suggest that there is ongoing inflationary pressure in the European system, which limits the ECB’s ability to cut interest rates. Today Spain released disappointing labor stats, with unemployment rising by 80k in September. The most important upcoming events for EUR traders are: Thursday’s ECB meeting and Friday’s nonfarm payrolls.

Markets are adding risk to portfolios putting some upward pressures on equities and commodities and downward pressure on the USD. News flow has been quiet, with most of the headlines focused on the RBA decision to cut interest rates by 25bpts. Yesterday’s stronger than expected US ISM is encouraging; however for markets the key inputs will come from tomorrow’s US election debate.

 Yesterday’s speech by Chair Bernanke contained no market relevant new information and instead defended QE and suggested that the Fed was in no way monetizing debt due to the ‘temporary’ nature of the asset purchases.

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 2, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Oct. 02

 

KRW

 

 

South Korean CPI (YoY) 

2.0%

 

2.0% 

 

1.2% 

 

 

 

 

AUD

 

 

Interest Rate Decision 

3.25%

 

3.50% 

 

3.50% 

 

 

 

 

GBP

 

 

Nationwide HPI (MoM) 

-0.4%

 

-0.3% 

 

1.1% 

   

 

 

EUR

 

 

Spanish Unemployment

79.60K

 

 

 

38.20K 

 

 

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 03 

10:00

EUR

Retail Sales (MoM) 

-0.2% 

-0.2% 

Oct. 04

12:00

GBP

Interest Rate Decision 

0.50% 

0.50% 

 

12:00

GBP

BOE QE Total 

375B 

375B 

 

12:45

EUR

Interest Rate Decision 

0.75% 

0.75% 

Oct. 05

11:00

EUR

German Factory Orders (MoM) 

-0.7% 

0.5% 

Government Bond Auction

Date Time Country 

Oct 03 09:10 Sweden 

Oct 03 10:00 Norway 

Oct 04 08:30 Spain 

Oct 04 08:50 France 

Oct 04 15:00 US 

Oct 05 15:30 Italy 

 

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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