EUR/USD Fundamental Analysis October 5, 2012 Forecast

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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

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