EUR/USD Fundamental Analysis September 14, 2012, Forecast
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Analysis and Recommendations:
The EUR/USD broke above the 1.29 price to trade at 1.2906 as markets now sit and wait on the statements from the Feds. The market place has a slight bias that the Fed will announce QE3, or some sort of fresh monetary stimulus package, on Thursday. But even if the Fed does not make a stimulus move on Thursday, the majority of the market place believes the U.S. central bank will act to ease monetary policy in the coming weeks. No significant action at all by the Fed Thursday would disappoint many commodity and stock market bulls and could put downside price pressure on many markets, including the precious metals.
The question is what has the markets factored in the price already and what are they expecting to hear from the Feds that will satisfy their demands and keep markets from reacting violently after the presentation.
Reuters and Bloomberg polls both show above a 62% chance that the Feds will launch QE3 with a significant amount of stimulus.
QE3: expect the Fed to launch an open ended QE program that will likely equate to close to $75bn per month targeted at both Treasury’s and MBS. A CNBC poll suggested 90%of money managers, strategist and economist polled expected QE; while yesterday’s Reuter’s survey suggested 65% of the 79 economist polled expected QE this year, but only 49% expected it to be launched today, with the median estimate in the amount of $500bn.
Operation Twist: Expect the Fed to continue operation twist, but recognize there is a chance they do not, but think there is limited market impact to this decision.
It is all guess work at this time, but the Fed’s statement will be released in a short while.
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 September 13, 2012 actual v. forecast
|
Date |
|
Currency |
|
|
Event |
Actual |
|
Forecast |
|
Previous |
|
|
|
Sep. 13 |
|
KRW |
|
|
South Korean Interest Rate Decision |
3.00% |
|
2.75% |
|
3.00% |
|
|
|
|
|
CHF |
|
|
PPI (MoM) |
0.5% |
|
-0.4% |
|
-0.3% |
|
|
|
|
|
CHF |
|
|
Interest Rate Decision |
0.00% |
|
0.00% |
|
0.00% |
|
|
|
|
|
EUR |
|
|
ECB Monthly Report |
|
|
|
|
|
|
|
|
|
|
USD |
|
|
Core PPI (MoM) |
|
|
0.2% |
|
0.4% |
|
|
|
|
|
USD |
|
|
PPI (MoM) |
|
|
1.1% |
|
0.3% |
|
|
|
|
|
USD |
|
|
Initial Jobless Claims |
|
|
370K |
|
365K |
|
|
|
|
|
USD |
|
|
Continuing Jobless Claims |
|
|
3318K |
|
3322K |
|
|
|
|
|
USD |
|
|
PPI (YoY) |
|
|
1.4% |
|
0.5% |
|
|
|
|
|
USD |
|
|
Core PPI (YoY) |
|
|
2.6% |
|
2.5% |
|
|
|
|
|
USD |
|
|
Interest Rate Decision |
|
|
0.25% |
|
0.25% |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Sep. 14 |
10:00 |
EUR |
2.6% |
2.6% |
|
|
|
10:00 |
EUR |
-0.2% |
-0.2% |
|
|
|
10:00 |
EUR |
1.7% |
1.7% |
|
|
|
13:30 |
USD |
0.2% |
0.1% |
|
|
|
13:30 |
USD |
0.6% |
0.8% |
|
|
|
13:30 |
USD |
0.5% |
0.0% |
|
|
|
13:30 |
USD |
0.7% |
0.8% |
|
|
|
14:15 |
USD |
0.2% |
0.6% |
|
|
|
14:55 |
USD |
74.1 |
74.3 |
Government Bond Auction
Date Time Country
Sep 14 10:00 Belgium
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