EUR/GBP Fundamental Analysis – August 19, 2015 – Forecast

Analysis and Recommendations:

The EUR/GBP tumbled 51 points to 0.7056 after UK inflation jumped which will support the Bank of England’s itch to increase lending rates. UK inflation data for July easily beat expectations – year-on-year inflation now sits at 0.1%, ahead of predictions for a reading of 0%.

Note that wages are rising and this will inevitably feed into the inflation profile in coming months. Consumers should not get used to the present conditions.

The Bank of England is wary of the prospect of higher prices in coming months and for this reason could look to regulate economic growth by raising interest rates.

Higher interest rates will attract foreign currency into the UK, thus boosting the value of the pound sterling.

In its latest economic outlook, the BoE predicted that the U.K.’s rate of inflation will not reach its 2 percent target again until the third quarter of 2017.

Low oil, food and imported goods prices account for much of the drag on inflation, according to the bank’s governor Mark Carney.

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.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, August 19, 2015

Government Bond Auctions

Date Time Country

Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz

Aug 19 11:03 Sweden Holds bond auction

Aug 20 10:30 Spain Auctions Bonos/Obligaciones

Aug 20 11:30 UK Auctions 4.25% 2036 Gilt

Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug