EUR/USD Monthly Fundamental Forecast April 2013

Get Forex buy/sell signals directly to your email and by SMS.
To learn more click here

EUR/USD Monthly Fundamental Forecast April 2013

EUR/USD Monthly Fundamental Forecast April 2013

Outlook and Recommendation

The EUR/USD  regained after banks in Cyprus reopened but remains weak heading into April. The euro is trading at 1.2821. An improved US economic outlook, persistent structural weakness in Europe, aggressive central bank intervention, credit risk differentiation within the emerging market universe, and excess global liquidity are key drivers of capital flows in foreign exchange markets. The Cyprus systemic shock heightened financial stress in European markets and placed the EUR and the GBP back on the defensive. The USD has regained strength against all major currencies supported by an improved growth and fiscal consolidation outlook combined with rising European risk. EUR is entering April having lost 7% from its February 1st high of 1.3711 with building downside pressure. Technicals highlight a bearish outlook as traders continue to build short positions (the CFTC reported a net short EUR position of -$7.2 billion as of March 19th). A revaluation of the risks associated with euro zone deposits, softening economic fundamentals and little progress on the banking union and other EMU reforms, leaves EUR vulnerable to further downside.

Maximum: 1.3158

Minimum: 1.2752

Difference: 0.0406

Average: 1.2963

Rev. %: -1.83

Europe is, once again, on the defensive. The unfolding of systemic risk in the Cyprus banking sector triggered a new phase of heightened financial market volatility and increased investor caution within the euro zone. Accordingly, the euro (EUR) regained a weakening profile over the past two months, which should extend through the remainder of the year. Therefore, analysts  have incorporated a higher degree of downside risk for the single currency and now expect EURUSD to close the year at 1.25. We expect the ECB to prove slow to turn dovish, but that ultimately the combination of the European growth outlook, the complicated road to the next stage in the EMU and relative ECB/Fed policy supports a weakening EUR trend. On the back of prolonged economic softness, weakening lending activity and persistent systemic weakness in the banking sector the euro continues to weaken

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Central Bank: FED and ECB

Central Bank – Fed Reserve

Date of next meeting or last meeting: May 01, 2013

Current Rate: 0.00% – 0.25%

Central Bank Name -European Central Bank

Date of next meeting or last meeting: April 04, 2013

Current Rate: 0.75%

EURUSD BNS April

Economic events for the month of April affecting EUR, CHF, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Apr 1

9:00

USD

ISM Manufacturing PMI

54.2

54.2

Apr 2

3:30

GBP

Manufacturing PMI

48.9

47.9

Apr 3

3:30

GBP

Construction PMI

47.7

46.8

 

7:15

USD

ADP Non-Farm Employment Change

203K

198K

 

9:00

USD

ISM Non-Manufacturing PMI

55.9

56.0

Apr 4

3:30

GBP

Services PMI

51.4

51.8

 

6:00

GBP

Asset Purchase Facility

375B

375B

  

GBP

Official Bank Rate

0.50%

0.50%

 

6:45

EUR

Minimum Bid Rate

0.75%

0.75%

  

USD

Unemployment Claims

354K

357K

Apr 5

2:00

CHF

Foreign Currency Reserves

 

430.0B

 

7:30

USD

Non-Farm Employment Change

201K

236K

  

USD

Trade Balance

-44.6B

-44.4B

Apr 8

20:30

CNY

CPI y/y

 

3.2%

Apr 9

2:15

CHF

CPI m/m

 

0.3%

 

3:30

GBP

Manufacturing Production m/m

 

-1.5%

Apr 12

7:30

USD

Core Retail Sales m/m

 

1.0%

  

USD

PPI m/m

 

0.7%

  

USD

Retail Sales m/m

 

1.1%

 

8:55

USD

Prelim UoM Consumer Sentiment

 

78.6

Apr 16

3:30

GBP

CPI y/y

  
 

7:30

USD

Building Permits

  
  

USD

Core CPI m/m

  

Apr 17

3:30

GBP

Claimant Count Change

  
 

4:00

EUR

German ZEW Economic Sentiment

  

Apr 18

3:30

GBP

Retail Sales m/m

  
 

7:30

USD

Unemployment Claims

  
 

9:00

USD

Philly Fed Manufacturing Index

  

Apr 22

9:00

USD

Existing Home Sales

  
 

20:45

CNY

HSBC Flash Manufacturing PMI

  

Apr 23

2:00

EUR

French Flash Manufacturing PMI

  
 

2:30

EUR

German Flash Manufacturing PMI

  
 

9:00

USD

New Home Sales

  

Apr 24

3:00

EUR

German Ifo Business Climate

  
 

7:30

USD

Core Durable Goods Orders m/m

  

Apr 25

3:30

GBP

Prelim GDP q/q

  
 

7:30

USD

Unemployment Claims

  

Apr 26

7:30

USD

Advance GDP q/q

 

0.4%

Apr 29

9:00

USD

Pending Home Sales m/m

  

Apr 30

9:00

USD

CB Consumer Confidence

  

 

 

Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
 
We value your privacy. Your e-mail address will not be shared.
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

  View all of FX Empire Analyst - Barry Norman's Articles    
Share Your Thoughts: Post a Comment


Your email address will not be published.