EUR/GBP Fundamental Analysis, February 25, 2015 – Forecast

Analysis and Recommendations:

The EUR/GBP added 12 points as the pound gave back some of yesterday’s unexpected gains and a dovish attitude from Mark Carney pushed the currency downwards. The euro is sitting tight ahead of Mario Draghi and Janet Yellen both due later in the day. The pair is at 0.7344. The pound reached a seven-year high versus the euro this week after jobs data signaled the U.K. recovery is holding up and as stalled negotiations on the future funding of Greece weighed on the common currency. Sterling extended gains into a third week against the euro after U.K. wage growth accelerated and unemployment fell in the fourth quarter. While inflation slowed to the least on record, Bank of England policy makers said they see consumer prices rising “fairly sharply” next year when effects of weaker oil prices may fade.

Today’s watch: As traders turn their attention to Janet Yellen’s testimony on Tuesday and Wednesday it is hard to forecast the US dollar volatility until she begins her presentation which is not until late in the trading session. The US dollar is continuously rising ahead of the event. Traders can expect Yellen to keep her hawkish attitude while lawmakers press her for some commitment. Also the EU Ministers will not give a final nod to Greece’s reforms until later tonight but markets have turned off on Greece so the euro can be expected to remain in the lower 1.13 price range and the greenback should hold near the 94.70 level over the next trading period. The pound will react to the greenback although it is trading extremely high is will most likely dipped to the bottom of the 1.54 range.  The CAD will remain weak and hold at the 1.26 level as crude oil is expected to remain in the red. Natural gas is expected to recover earlier declines as traders booked profits, but weather forecasts continue to show storms and cold.  Otherwise commodities will remain quiet until tomorrow when China returns from holidays.

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 actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, February 25, 2015

Government Bond Auctions

Date Time Country

Feb 24 11:10 Italy Eur 2.5-3bn Feb 2017 CTZ, plus Eur 0.5-1bn Sep 2026 BTPei

Feb 24 19:00 US 26bn 2-yr Notes

Feb 25 11:03 Sweden Sek 1.75bn 4.25% Mar 2019 & Sek 1.75bn 3.5% Jun 2022 bonds

Feb 25 11:30 Germany Eur 4bn Apr 2020 Bobl

Feb 25 19:00 US 13bn 2-yr FRNs, plus 35bn 5-yr Notes

Feb 26 11:10 Italy Auctions BTPs

Feb 26 19:00 US 29bn 7-yr Notes

Mar 03 11:15 Austria Holds RAGB bond sale

Mar 03 11:30 UK Auctions conventional Gilt

Mar 04 16:30 Sweden Details bond sale on 11 Mar

Mar 05 10:30 Spain Auctions Bonos

Mar 05 11:10 France Auctions OATs

Mar 05 17:00 US Announces 3/10 year Notes, plus 30-yr Bond