EUR/GBP Fundamental Analysis October 30, 2014 Forecast

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Updated: Aug 25, 2015, 07:00 UTC

Analysis and Recommendations: The EUR/GBP added 7 points to trade at 0.7902 as the euro gained a bit of momentum ahead of the FOMC decision. The pound

EUR/GBP Fundamental Analysis October 30, 2014 Forecast

Analysis and Recommendations:

The EUR/GBP added 7 points to trade at 0.7902 as the euro gained a bit of momentum ahead of the FOMC decision. The pound lagged the euro, which got a lift from European Central Bank stress tests that found smaller-than-expected capital requirements among the region’s banks, lifting some of the economic gloom surrounding the euro zone. Sterling money markets are pricing in a first interest rate rise by the Bank of England around the middle of next year, potentially the first post-crisis hike by any big central bank.

But there is a degree of uncertainty surrounding the strength of Britain’s economic recovery and, by extension, the timing of the BoE’s first rate hike, with political risk also increasingly a factor for investors.

“The moderate wage growth in UK labour market and the disinflationary pressures sustain a longer period of loose monetary policy in the UK,” said Peter Rosenstreich, head of market strategy at Swissquote.

Analysts said the European Commission’s proposal to raise Britain’s contribution to the EU budget by 2.1 billion euros – due to the relative strength of the British economy – was also likely to cloud sentiment and push up the risk premium for buying the pound.

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:

Cur.	Event	Actual	Forecast
JPY	Industrial Production	2.7%	2.2%	-1.9%
NZD	Business Confidence	26.5%		13.4%
CAD	RMPI (MoM) (Sep)		-1.0%	-2.2%
USD	FOMC Statement
USD	Fed Funds Target Rate		0.25%	0.25%

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
NZD	RBNZ Rate Statement
AUD	HIA New Home Sales			3.3%
GBP	Nationwide HPI (MoM)		0.3%	-0.2%
GBP	MPC Member Cunliffe
EUR	Spanish GDP (QoQ)		0.5%	0.6%
EUR	German Unemployment		5K	13K
EUR	German Unemployment		6.7%	6.7%
USD	GDP (QoQ) (Q3)		3.0%	4.6%
USD	GDP Price Index (QoQ)		2.0%	2.1%
USD	Initial Jobless Claims		283K	283K
USD	Fed Chair Yellen
EUR	German CPI (MoM)		-0.1%	0.0%