EUR/USD Fundamental Forecast – June 1, 2016

The EUR/USD dipped 7 points to trade at 1.1132 after the release of a lackluster Eurozone inflation report. Inflation printed at expectations but continued to show a drop of -0.1% while Unemployment printed at 10.2 as forecast. The US dollar continued its Fed inspired rally started last week on Fed speakers and then supported by the FOMC minutes and then Janet Yellen’s hawkish attitude on Friday.

The U.S. currency is struggling to go higher, said FPG Securities Chief Executive Koji Fukaya, “as investors want to make moves after seeing U.S. economic data.” The ISM manufacturing report and jobs data for May are due Wednesday and Friday, respectively.

Upbeat data may lift the dollar to the ¥112-mark by the end of the week if investors continue to unwind speculative yen-buying, Fukaya said, though some may still seek the safety of the traditional haven ahead of the U.K. referendum on European Union membership on June 23.

The Fed should raise rates “in the coming months” if growth picks up and the labour market continues to improve, Ms Yellen said on Friday. St Louis Fed President James Bullard chimed in, saying yesterday, global markets appear to be “well-prepared” for a summer rate hike, although he did not specify a date for the policy move.

The probability of a rate increase at the Federal Open Market Committee’s June 14-15 meeting rose to around 34 per cent from 26 per cent on Thursday, according to CME’s Fedwatch program. Bets on an increase at the July 26-27 policy meeting edged up to 60 per cent, more than double the level of a month ago.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Upcoming Economic Events that you should be monitoring:

Wednesday, June 1, 2016

Government Bond Auctions

Date Time       Country           Auction

May 30 11:10 Italy Eur 2-2.5bn 0.45% Jun 2021 BTP

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn 0% Apr 2021 Bobl

Jun 01 11:30 UK Gbp 2.75bn 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 10:50 France Eur 8-9bn 2.25% May 2024, 0.5% May 2026 & 3.25%

Jun 02 11:03 Sweden Sek 0.5bn 0.125% 2019 I/L & Sek 0.5bn 0.125% 2026 I/L bonds

Jun 06 13:00 Norway Details of bond auction on Jun 08

Jun 07 11:00 Netherlands Eur 4-6bn Jan 2022 DSL

Jun 07 11:00 Austria Holds bond auction

Jun 07 11:30 Germany Holds I/L bond auction

Jun 07 11:30 UK 4.5% 2046 Gilt

Jun 08 11:03 Sweden Holds bond auction

Jun 08 11:05 Norway Holds bond auction

Jun 08 11:30 Germany Eur 5bn Jun 2018 Schatz

Jun 08 17:20 Italy Announces details of bond auction

Jun 09 11:30 UK 0.125% 2036 I/L Gilt

Jun 09 17:20 Sweden Announces details of I/L auction on Jun 16