EUR/USD Fundamental Analysis September 7, 2012, Forecast
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Analysis and Recommendations:
The EUR/USD is trading at 1.2617 with little response to Mr. Draghi’s announcement. The three major year‐to‐date themes (the European crisis, global growth and the central banking response) are all taking center stage today, leaving FX markets favoring a weaker USD. Today, both the ECB and BoE left interest on hold, while the Riksbank cut rates to 1.25%.
The OECD made downward revisions to its global growth outlook noting an acceleration in the slowdown in Europe, the US and EM. In this environment AUD is outperforming, up 0.4%, on rumors of a PBoC cut and a falling unemployment rate. The focus today is likely to be building excitement of nonfarm (cons. 127k) and how that flows into the FOMC decision.
With the euro above 1.26 it is likely that a significant amount of good news has been priced in and accelerated short covering. Since President Draghi announced the morning of July 26th that he would do whatever it takes currency volatility has dropped further and most currencies have rallied substantially against the USD. However, as the ECB commits to removing tail risk, the downside risks fade, especially as the FOMC appears poised to launch QE3 and the US fiscal side remains a significant uncertainty and weight against the USD.
The German court assessment on the ESM (September 12th) is crucial before the ECB will be able to launch its program. However most of this has been priced into EUR, leaving the potential surprises 1) the outlook (there will be new staff projections released today); 2) any collateral changes and 3) a hint of a new lending program.
Market sentiment seems to remain on the positive side, although there was little reaction in the euro but European exchanges added gains.
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 6, 2012 actual v. forecast
|
Date |
|
Currency |
|
|
Event |
Actual |
|
Forecast |
|
Previous |
|
|
|
Sep. 06 |
|
KRW |
|
|
South Korean GDP (QoQ) |
0.3% |
|
0.4% |
|
0.4% |
|
|
|
|
|
AUD |
|
|
Employment Change |
-8.8K |
|
5.0K |
|
11.7K |
||
|
|
|
AUD |
|
|
Unemployment Rate |
5.1% |
|
5.3% |
|
5.2% |
|
|
|
|
|
JPY |
|
|
BoJ Governor Shirakawa Speaks |
|
|
|
|
|
|
|
|
|
|
GBP |
|
|
Halifax House Price Index (MoM) |
-0.4% |
|
0.3% |
|
-0.7% |
||
|
|
|
EUR |
|
|
GDP (QoQ) |
-0.2% |
|
-0.2% |
|
-0.2% |
|
|
|
|
|
EUR |
|
|
German Factory Orders (MoM) |
0.5% |
|
0.2% |
|
-1.6% |
||
|
|
|
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 |
|
|
ADP Nonfarm Employment Change |
201K |
|
140K |
|
173K |
||
|
|
|
USD |
|
|
Initial Jobless Claims |
365K |
|
370K |
|
377K |
||
|
|
|
EUR |
|
|
ECB Press Conference |
|
|
|
|
|
|
|
|
|
|
USD |
|
|
Continuing Jobless Claims |
3322K |
|
3315K |
|
3328K |
||
|
|
|
USD |
|
|
ISM Non-Manufacturing Index |
53.7 |
|
52.5 |
|
52.6 |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Sep. 07 |
00:01 |
GBP |
-24% |
-24% |
|
|
|
09:30 |
GBP |
1.5% |
-2.5% |
|
|
|
09:30 |
GBP |
2.0% |
-2.9% |
|
|
|
09:30 |
GBP |
1.7% |
1.3% |
|
|
|
09:30 |
GBP |
1.2% |
-2.4% |
|
|
|
09:30 |
GBP |
-2.8% |
-4.3% |
|
|
|
11:00 |
EUR |
0.2% |
-0.9% |
|
|
|
13:30 |
USD |
0.2% |
0.1% |
|
|
|
13:30 |
USD |
124K |
163K |
|
|
|
13:30 |
USD |
34.5 |
34.5 |
|
|
|
13:30 |
USD |
142K |
172K |
Government Bond Auction
Date Time Country
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
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