GBP/USD Weekly Fundamental Analysis October 8-12, 2012 Forecast

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Weekly Analysis and Recommendation:

The GBP/USD closed on Monday at 1.6131 and ended the week at 1.6132 with a bit of activity in between but nothing new and exciting. The BoE held rates and policy as expected and thereby avoided a public statement. The USD rallied slightly on a positive nonfarm payroll report on Friday when unemployment fell to 7.8%

Date

Last

Open

High

Low

Change %

Oct 05, 2012

1.6132

1.6184

1.6217

1.6123

-0.32%

Oct 04, 2012

1.6184

1.6100

1.6202

1.6082

0.52%

Oct 03, 2012

1.6100

1.6129

1.6141

1.6067

-0.19%

Oct 02, 2012

1.6130

1.6131

1.6187

1.6125

-0.01%

Oct 01, 2012

1.6131

1.6122

1.6175

1.6110

0.06%

Last week the IMF once again revised downward growth figures which were weighing on the GBP as the eurozone problems continue to plague the UK. Although on Thursday ECB President Draghi held a news conference and pledged once again to aid the ailing economies and said that the OMT is ready for action.

A lackluster UK economic calendar leaves the British Pound at the mercy of larger market themes. The Eurozone debt crisis remains a major consideration. As a regional alternative to the Euro, the UK currency remains a beneficiary of haven flows at times of elevated sovereign stress, and the week ahead promises plenty of opportunities for another flare-up. At the same time, global slowdown fears remain ever-present. A risk-off move on these grounds stands to weigh on Sterling against havens like the US Dollar and Japanese Yen while driving strength against overtly sentiment-driven commodity bloc currencies, and vice versa.

All eyes initially turn to Luxembourg, where Eurozone finance ministers will gather for a two-day meeting to discuss debt management efforts. 

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 1-5 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Oct. 01 

CHF

Retail Sales (YoY) 

5.9%

4.5%

2.9%

 

CHF

SVME PMI 

43.6

47.5

46.7

 

EUR

Italian Manufacturing PMI 

45.70

44.20

43.60

 

EUR

French Manufacturing PMI 

42.7

42.6

42.6

 

EUR

German Manufacturing PMI 

47.4

47.3

47.3

 

EUR

Manufacturing PMI 

46.1

46.0

46.0

 

GBP

Manufacturing PMI 

48.4

49.3

49.5

 

USD

ISM Manufacturing Index 

51.5

49.7

49.6

 Oct. 02

GBP

Nationwide HPI (MoM) 

-0.4%

-0.3%

1.1%

 

EUR

Spanish Unemployment Change 

79.60K

 

38.20K

 Oct. 03

GBP

Services PMI 

52.2

53.1

53.7

 

EUR

Retail Sales (MoM) 

0.1%

-0.1%

0.1%

 

USD

ADP Nonfarm Employment Change 

162K

143K

189K

 

USD

ISM Non-Manufacturing Index 

55.1

53.2

53.7

Oct. 04

GBP

Halifax House Price Index (MoM) 

-0.4%

0.2%

-0.4%

 

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

Initial Jobless Claims 

367K

370K

363K

 

USD

Continuing Jobless Claims 

3281K

3271K

3281K

Oct. 05

EUR

GDP (QoQ) 

-0.2%

-0.2%

-0.2%

 

EUR

German Factory Orders (MoM) 

-1.3%

-0.5%

0.3%

 

USD

Average Hourly Earnings (MoM) 

0.3%

0.2%

0.0%

 

USD

Nonfarm Payrolls 

114K

113K

142K

 

USD

Average Weekly Hours 

34.5

34.4

34.4

 

USD

Private Nonfarm Payrolls 

104K

130K

97K

Historical: From 2010 to Present

Highest: 1.6747 USD on April 28, 2011.

Average: 1.5751 USD over this period

Lowest: 1.4229 USD on May 20, 2010.

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 08 

08:15

CHF

CPI (MoM) 

0.3%

 

 

11:00

EUR

German Industrial Production (MoM) 

-0.9%

1.3%

Oct. 09

00:01

GBP

RICS House Price Balance 

-20%

-19%

 

09:30

GBP

Industrial Production (MoM) 

-0.5%

2.9%

 

09:30

GBP

Manufacturing Production (MoM) 

-0.6%

3.2%

 

09:30

GBP

Trade Balance 

-8.5B

-7.2B

 

09:30

GBP

Industrial Production (YoY) 

-1.1%

-0.8%

 Oct. 11

07:00

EUR

German CPI (YoY) 

2.0%

2.0%

 

07:45

EUR

French CPI (MoM) 

 

0.7%

Oct. 12 

10:00

EUR

Industrial Production (MoM) 

-0.5%

0.6%

Upcoming Government Bond Auctions

Date Time Country 

Oct 08 09:10 Norway 

Oct 08 15:30 Italy  

Oct 09 08:30 Holland 

Oct 09 09:30 UK 

Oct 09 14:30 UK 

Oct 09 17:00 US 

Oct 10 09:10 Italy  

Oct 10 09:10 Sweden 

Oct 10 09:30 Germany 

Oct 10 09:30 Swiss 

Oct 10 14:30 Sweden 

Oct 10 17:00 US 

Oct 11 09:10 Italy  

Oct 11 09:10 Sweden 

Oct 11 09:30 UK 

Oct 11 15:00 US 

Oct 11 17:00 US 

Oct 12 09:30 Germany 

Oct 12 10:00 Belgium 

 

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About: FX Empire Analyst - Barry Norman

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