EUR/GBP Fundamental Analysis – August 7, 2015 – Forecast

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Published: Aug 6, 2015, 12:56 UTC

Analysis and Recommendations: The EUR/GBP slipped 4 points to 0.6986 as the currencies diverged. Pound traders are waiting for Mr. Carny’s presentation on

EUR/GBP Fundamental Analysis – August 7, 2015 – Forecast

Analysis and Recommendations:

The EUR/GBP slipped 4 points to 0.6986 as the currencies diverged. Pound traders are waiting for Mr. Carny’s presentation on the new Super Thursday, while euro traders focus on Greece once again.

The minutes of the August meeting described the 0.4pc expansion seen in the first quarter as “disappointing”. It said while the 0.7pc bounce-back in the second quarter was “encouraging”, it added: “underlying momentum had perhaps been softer than expected” – driven by one-off surges in oil production.

The central bank has effectively ruled out an interest rate rise this year, on the back of falling commodity prices and a stronger pound.

While the monetary policy committee judged that the risks from Greece had faded, members warned that the strength of the pound could have a disinflationary impact.

As sterling has strengthened, imports have become cheaper, meaning that inflation is likely to remain below the Bank’s 2pc target for longer.

These comments have signaled an endorsement of the market view that we’ll have to wait until next spring for the Bank’s rates to rise.

The dovish tone sent the pound lower against both the dollar and the euro, falling by around 1pc against each on the day.

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:

Cur.	Event	Actual	Forecast	Previous
AUD	Employment Change (Jul)	38.5K	10.0K	7.0K
AUD	Unemployment Rate (Jul)	6.3%	6.0%	6.1%
EUR	German Factory Orders (MoM) (Jun)	2.0%	0.2%	-0.3%
GBP	Halifax House Price Index (YoY) (Jul)	7.9%	8.2%	9.6%
GBP	Industrial Production (MoM) (Jun)	-0.4%	0.1%	0.3%
GBP	Manufacturing Production (MoM)	0.2%	0.2%	-0.6%
GBP	BoE Inflation Report
GBP	BoE QE Total (Aug)	375B	375B	375B
GBP	Interest Rate Decision (Aug)	0.50%	0.50%	0.50%
GBP	BoE MPC Meeting Minutes

Upcoming Economic Events that you should be monitoring:

Friday, August 7, 2015

Cur.	Event	Actual	Forecast	Previous
JPY	BoJ Press Conference
USD	Nonfarm Payrolls (Jul)		223K	223K
USD	Unemployment Rate (Jul)		5.3%	5.3%
CAD	Employment Change (Jul)		5.0K	-6.4K
CAD	Ivey PMI (Jul)		52.0	55.9