EUR/USD Fundamental Analysis October 5, 2012 Forecast

Posted October 04, 2012 17:24 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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Analysis and Recommendations:

The EUR/USD soared on statements from ECB President Draghi to trade at 1.3014. The euro touched fresh two-week highs against the dollar, in line with a generally improved risk sentiment in the aftermath of encouraging comments on the single currency from European Central Bank President Mario Draghi. Draghi, in a news conference, vowed to preserve the euro zone’s monetary system and its currency.

The ECB left its main refinancing rate unchanged at 0.75% which was in keeping with the expectations of 48 out of 52 forecasters. The press conference was where all the action was, and it’s difficult to imagine what new can be said as the ECB observes Spanish politics that are hindering Spain’s interest in applying for aid that would trigger conditional ECB bond buying. A recent article may have it right stating “it’s not clear that the ECB will be able to rescue Spain even should it apply for aid, in light of regional elections that will conjure risks to revenue sharing and political stability all the while as Spain risks missing near-term fiscal targets and higher capital requirements than its recent state-sponsored stress tests indicated.”

In the US reports showed that initial jobless claims increased 4,000 to 367,000 for the week ending Sept. 29. The number came a day ahead of the nonfarm payroll report which for months greatly has affected commodity and currency prices. With the Federal Reserve’s implementation of open-ended quantitative easing, though, that unemployment number may have affect tomorrow.

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 4, 2012 actual v. forecast

Date	Currency	Event	Actual	Forecast	Previous
Oct. 04	AUD	Building Approvals (MoM)	6.4%	4.7%	-21.2%
	AUD	Retail Sales (MoM)	0.2%	0.4%	-0.8%
	GBP	Halifax House Price Index (MoM)	-0.4%	0.2%	-0.4%
	GBP	Interest Rate Decision	0.50%	0.50%	0.50%
	GBP	BOE QE Total	375B	375B	375B
	EUR	Interest Rate Decision	0.75%	0.75%	0.75%
	USD	Initial Jobless Claims	367K	370K	363K
	EUR	ECB Press Conference
	USD	Continuing Jobless Claims	3281K	3271K	3281K
	CAD	Ivey PMI	60.4	59.0	62.5

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

Date	Time	Currency	Event	Forecast	Previous
Oct. 05	10:00	EUR	GDP (QoQ)	-0.2%	-0.2%
	11:00	EUR	German Factory Orders (MoM)	-0.5%	0.5%
	13:30	USD	Average Hourly Earnings (MoM)	0.2%	0.0%
	13:30	USD	Nonfarm Payrolls	110K	96K
	13:30	USD	Average Weekly Hours	34.4	34.4
	13:30	USD	Private Nonfarm Payrolls	125K	103K

Government Bond Auction

Date Time Country

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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