EUR/USD Fundamental Analysis September 6, 2012 Forecast

Analysis and Recommendations:

The EUR/USD is trading at this time at 1.2602, slightly up so far today after some of Mr. Draghi’s plans have been leaked to the new services.

The euro continues to trade within its narrow 10-session 172 point range (1.2466 to 1.2638). Fundamental data has been mixed with PMIs suggesting that on balance the European economies are contracting but that the pace of contraction is slowing. For EUR, the key risk is tomorrow’s ECB meeting. Markets are pricing in a limited 8% probability of an interest rate cut (however the economics community is favoring a cut, with 30 of 58 economists expecting a cut). Significant focus remains on details of the bond buying plan. However, the timing of the German constitutional ruling on the ESM (Sept. 12) is complicating the potential implementation and full details of the ECB’s plan. In addition, President Draghi laid out his plans when he presented to Parliament on September 3rd accordingly the potential for new information stemming from the ECB meeting is more limited than some headlines suggest. News that Jean-Claude Juncker, head of the Eurogroup, will attend the ECB meeting and present the economic and financial situation is interesting.

In other news, a mid-European session rally in EUR is rumored to have been the SNB buying EUR; however there is so far no confirmation. President Hollande and PM Monti have concluded their talks, with most of the comments over how in their view bond spread levels have disconnected from fundamentals. In addition, the European banking sector is gaining focus in both Spain (Bankia) and France.

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 5, 2012 actual v. forecast

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

Government Bond Auction

 Date    Time   Country 

Sep 06 00:30 Japan 

Sep 06 08:30 Spain 

Sep 06 08:50 France 

Sep 06 09:10 Sweden 

Sep 06 15:00 US 

Sep 07 15:30 Italy

Sep 10 09:30 Germany 

Sep 10 15:30 Italy  

Sep 11 00:30 Japan 

Sep 11 08:30 Holland 

Sep 11 09:10 Greece 

Sep 11 09:30 UK 

Sep 11 14:30 UK 

Sep 11 17:00 US 

Sep 12 09:10 Italy  

Sep 12 09:10 Sweden 

Sep 12 09:30 Germany 

Sep 12 09:30   Swiss 

Sep 12 14:30 Sweden 

Sep 12 17:00 US