EUR/GBP Fundamental Analysis October 13, 2014 Forecast

Analysis and Recommendations:

The EUR/GBP gained 10 points to trade at 0.7889 after UK trade balance numbers narrowed showing a significant drop in exports and imports. The euro fell also giving up 30 points against the US dollar. ECB President Mario Draghi said in a keynote speech at the Brookings Institution that ‘he expects bank lending, a key impediment to growth in the euro zone at the moment, to pick up early next year.’ The ECB is putting the euro zone’s 131 largest banks through a thorough balance sheet review to weed out soured loans and check whether they have valued assets correctly before it takes over as their new centralized supervisor in November. Sterling sank 0.4 percent after the anti-EU UK Independence Party won its first seat in British parliament in a landslide victory, proving it poses a threat to the country’s two main parties in a national election next year.

The Bank of England on Thursday, as widely expected, kept its cash rate unchanged at 0.5% and maintained its asset purchase programme of 375 billion pounds. The MPC, as usual, made no other statement on the outlook for monetary policy or the economy. 

U.K. FinMin George Osborne said in an interview on BBC that Britain already being affected by weakness in the euro zone; U.K. better placed to weather economic storm due to action taken over last 4 years and needs ECB to do its part to help euro zone economy. 

The head of the International Monetary Fund, Christine Lagarde said on Thursday that the world’s policymakers must take economic reforms more seriously, or they could see their economies stuck in a muddle of mediocre growth with high debt and unemployment. 

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:

Government Bond Auction

Date Time Country Auction

Oct 13 09:00 Norway T-bill auction

Oct 13 09:10 Italy BTP/CCTeu auctions

Oct 13 09:30 Germany Eur 2.0bn new 6M Bubill (Apr 2015) auction

Oct 14 08:30 Spain 6 & 12M T-bill auction

Oct 14 09:30 Belgium 3 & 12M T-bill auction (Jan & Oct 2015)

Oct 15 09:03 Sweden Bond auction

Oct 15 09:30 Germany Eur 4.0bn Sep 2016 Schatz auction

Oct 16 08:30 Spain Bono/Obligacion auction

Oct 16 09:30 UK Auctions 0.125% 2024 I/L Gilt

Oct 16 15:00 US Announces details of 30Y TIPS auction on Oct 23