EUR/USD Weekly Fundamental Analysis October 15-19, 2012 Forecast

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EUR/USD Weekly Fundamental Analysis October 15-19, 2012 Forecast

EUR/USD Weekly Fundamental Analysis October 15-19, 2012 Forecast

Weekly Analysis and Recommendation:

The EUR/USD closed the week at the 1.2950 price range where it held most of the week. Mid week the euro dipped to the 1.28 range but bounced right back. S%P continued to influence the markets when they downgraded Spanish debt to a step above JUNK status.

The euro declined against most of its major counterparts as concern that the global economy is slowing overshadowed policy makers’ efforts to contain Europe’s three-year-old debt crisis. The shared currency touched it’s lowest versus the dollar in almost two weeks as the International Monetary Fund cut its growth forecasts. It also said Greece should get more time to meet fiscal targets.

European Union leaders meet next week. 

The euro region’s economy will expand 0.4 percent this year, 0.1 percentages point less than forecast in July, and grow 0.2 percent in 2013, versus 0.7 percent predicted three months ago, the Washington-based IMF said in a report. The world economy will grow 3.3 percent this year, the slowest pace since the 2009 recession, compared with a July forecast of 3.5 percent, it said.

There optimism that Spain will request an aid package, which would unlock the ECB’s bond- buying plan to reduce borrowing, costs in debt-strapped nations on its periphery. New York-based S&P said Oct. 10 it had cut Spain’s rating two levels to BBB-. Spanish Prime Minister Mariano Rajoy has held off on deciding whether to request a bailout, a condition the ECB insists on.

Earlier in the week EU Ministers activated the ESM officially so it is in place to help ailing countries.

Mr. Draghi from the ECB reiterated that the ECB would help all countries in need but they must apply and then accept terms and conditions imposed by the bank. Without an agreement there would be assistance and the ECB would stop buying bonds in the market.

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.

Major Economic Events for the week of October 8-12, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Oct. 08

CHF

CPI (MoM) 

0.3%

0.3%

0.0%

 

EUR

German Industrial Production (MoM) 

-0.5%

-0.8%

1.2%

Oct. 09

GBP

RICS House Price Balance 

-15%

-20%

-18%

 

GBP

Industrial Production (MoM) 

-0.5%

-0.5%

2.8%

 

GBP

Manufacturing Production (MoM) 

-1.1%

-0.6%

3.1%

 

GBP

Trade Balance 

-9.8B

-8.5B

-7.3B

 

GBP

Industrial Production (YoY) 

-1.2%

-1.1%

-0.8%

 

GBP

NIESR GDP Estimate 

0.8%

 

0.1%

Oct. 10

USD

10-Year Note Auction 

1.700%

 

1.764%

Oct. 11

EUR

German CPI (MoM) 

0.0%

0.0%

0.4%

 

EUR

German CPI (YoY) 

2.0%

2.0%

2.1%

 

EUR

French CPI (MoM) 

-0.3%

0.1%

0.7%

 

USD

Import Price Index (MoM) 

1.1%

0.7%

1.1%

 

USD

Trade Balance 

-44.2B

-44.0B

-42.5B

 

USD

Initial Jobless Claims 

339K

370K

369K

 

USD

Continuing Jobless Claims 

3273K

3275K

3288K

Oct. 12

EUR

Industrial Production (MoM) 

0.6%

-0.4%

0.6%

 

USD

Core PPI (MoM) 

0.0%

0.2%

0.2%

 

USD

PPI (MoM) 

1.1%

0.7%

1.7%

 

USD

PPI (YoY) 

2.1%

1.8%

2.0%

 

USD

Core PPI (YoY) 

2.3%

2.5%

2.5%

 

USD

Michigan Consumer Sentiment 

83.1

78.0

78.3

 

USD

Federal Budget Balance 

75.0B

42.0B

-191.0B

Historical: From 2010 to Present

Highest: 1.4940 USD on May 04, 2011.

Average: 1.3434 USD over this period.

Lowest: 1.1877 USD on Jun 07, 2010.

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

 Oct. 15

08:15

CHF

PPI (MoM) 

0.4%

0.5%

 

13:30

USD

Core Retail Sales (MoM) 

0.5%

0.8%

 

13:30

USD

NY Empire State Manufacturing Index 

-5.0

-10.4

Oct. 16

09:30

GBP

CPI (YoY) 

2.2%

2.5%

 

09:30

GBP

PPI Input (MoM) 

-0.1%

2.0%

 

09:30

GBP

CPI (MoM) 

0.4%

0.5%

 

09:30

GBP

PPI Input (YoY) 

-0.8%

1.4%

 

10:00

EUR

CPI (YoY) 

2.7%

2.7%

 

10:00

EUR

German ZEW Economic Sentiment 

-16.0

-18.2

 

10:00

EUR

Core CPI (YoY) 

 

1.5%

 

13:30

USD

Core CPI (MoM) 

0.2%

0.1%

 

13:30

USD

CPI (MoM) 

0.4%

0.6%

 

13:30

USD

CPI (YoY) 

1.8%

1.7%

 

13:30

USD

Core CPI (YoY) 

2.0%

1.9%

 

14:00

USD

TIC Net Long-Term Transactions 

 

67.0B

 

14:15

USD

Industrial Production (MoM) 

0.2%

-1.2%

Oct. 17

09:30

GBP

Average Earnings Index +Bonus 

 

1.5%

 

09:30

GBP

Claimant Count Change 

 

-15.0K

 Oct. 18

09:30

GBP

Retail Sales (MoM) 

0.4%

-0.2%

 

09:30

GBP

Retail Sales (YoY) 

2.1%

2.7%

Government Bond Auction

Date Time Country 

Oct 15 09:10 Slovakia 

Oct 15 10:00 Norway 

Oct 16 08:30 Spain 

Oct 16 09:10 Greece 

Oct 16 09:30 Belgium 

Oct 17 09:10 Sweden 

Oct 17 09:30 Germany 

Oct 17 09:30 Portugal 

Oct 17 10:00 Norway 

Oct 17 14:30 Sweden 

Oct 18 08:30 Spain 

Oct 18 08:50 France 

Oct 18 09:30 UK 

Oct 18 09:50 France 

Oct 18 14:30 Sweden 

Oct 18 15:00 US 

Oct 18 17:00 US

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