EUR/USD Fundamental Analysis September 24, 2012 Forecast

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Analysis and Recommendations:

The EUR/USD climbed in the afternoon to trade at 1.3003.  The EUR/USD continues to trade sub-1.30 however, weighed down by Thursday’s weak French PMIs. Even a successful Spanish debt auction was not enough to trigger a rebound – given it implies no urgent need for an aid request to the EFSF.

 The Financial Times has reported that EU officials are working with the Spanish government behind the scenes on the details a new economic plan for Spain, which could eventually pave the way for a formal aid request. The FT story flags discussions between Madrid and the EC that “are focusing on measures that would be demanded by international lenders as part of a new rescue program, ensuring they are in place before a bailout is formally requested.”  The FT cites sources as saying that a plan will be unveiled by next Thursday.  As we will write in our week ahead column to be shared later this morning, a catalyst in terms of timing may well be next week’s planned update on Spain’s year-to-date budget deficit that had already previously been tracking 44% higher than in 2011.  It’s unlikely that deficit pressures are becoming any less acute as eurozone growth disappoints such that heightened uncertainty over Spanish finances may well be catapulting the country toward a bail-out.

Eurozone PMI numbers for September were not inspiring with the composite PMI printing slightly softer than expectations at 45.9. Manufacturing and services PMIs is Germany came in stronger than expected at 47.3 and 50.6 in September while the French PMIs trailed consensus at 42.6 and 46.1 respectively.

Greek PASOK party leader Venizelos noted that Greeks have made many sacrifices and the government should not “burden the society”.  He noted that Greece should be given “another two years” to meet its budget deficit targets and this issue should be broached with the Troika officials. He added that the plan for spending cuts will not be ready for discussion by September 23.

Greece’s tri-party coalition still cannot reach agreement on how to deliver €11.5 billion in additional cuts in order to secure the next round of aid payments.  The second attempt has failed, and another shot at it will be made next week.  The troika’s inspectors are leaving today.

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 21, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 21

 

AUD

 

 

CB Leading Index (MoM) 

0.0%

 

 

 

0.5% 

   

 

 

NZD

 

 

Credit Card Spending (YoY) 

1.0%

 

 

 

0.1% 

 

 

 

 

EUR

 

 

Dutch Consumer Spending 

-1.50

 

 

 

-0.50 

   

 

 

GBP

 

 

Public Sector Net Borrowing 

12.4B

 

13.3B 

 

-1.9B 

   

 

 

CAD

 

 

Core CPI (MoM) 

0.3%

 

0.3% 

 

-0.1% 

 

 

 

 

CAD

 

 

CPI (MoM) 

0.2%

 

0.4% 

 

-0.1% 

 

 

 

 

CAD

 

 

Wholesale Sales (MoM) 

-0.6%

 

-0.1% 

 

-0.3% 

   

 

 

CAD

 

 

CPI (YoY) 

1.2%

 

1.0% 

 

1.3% 

 

 

 

 

EUR

 

 

Belgium NBB Business Climate 

-11.6

 

-11.2 

 

-11.8 

 

 

 

Upcoming Economic Events that affect the EUR ( there are no USD or CAD events )

Date

Time

Currency

Event

Forecast

Previous

 Sep. 24

09:00

EUR

German Ifo Business Climate Index 

102.1 

102.3 

 

09:00

EUR

German Current Assessment 

 

111.2 

 

09:00

EUR

German Business Expectations 

 

94.2 

Government Bond Auction

Date Time Country 

Sep 24 09:10 Norway 

Sep 24 09:30 Germany 

Sep 24 10:00 Belgium 

Sep 24 15:30 Italy  

Sep 25 08:30 Holland 

Sep 25 08:30 Spain 

Sep 25 09:10 Italy  

Sep 25 14:30 UK 

Sep 25 17:00 US 

Sep 26 09:10 Italy  

Sep 26 09:10 Sweden 

Sep 26 09:00 Germany 

Sep 26 14:30 Sweden 

Sep 26 17:00 US 

Sep 27 00:30 Japan 

Sep 27 09:10 Italy  

Sep 27 17:00 US 

 

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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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