EUR/GBP Fundamental Analysis – September 1, 2015 – Forecast

Analysis and Recommendations:

The EUR/GBP added 5 points as the euro rallied a bit after better than expected inflation data. The UK is on holiday so the pair is seeing light volume. The pair is at 0.7266. Official figures show inflation in the 19-nation eurozone was stable in August at an annual rate of 0.2 percent.

The European Union’s statistics agency, Eurostat, says Monday that a large drop in energy prices made up for increases in the costs of food, alcohol and tobacco, services and industrial goods.

The inflation figures remains far below the European Central Bank’s aim for a 2 percent annual rate. The central bank is pumping 60 billion euros ($68 billion) a month of new money into the financial system of the eurozone to boost inflation. A prolonged period of low inflation or, worse, an outright drop in consumer prices, can hurt an economy by encouraging consumers to delay purchases.

The governor of the Bank of England, Mark Carney, said on Saturday that a slowdown in China’s economy could push down further on inflation but did not change, for now, the central bank’s position on when and how it might increase interest rates.

Carney, speaking at an annual US central banking conference in Jackson Hole, Wyoming, reiterated his view that the recovery in Britain’s economy “will likely put the decision as to when to start the process of gradual monetary policy normalization into sharper relief around the turn of this year”.

That comment echoed one he made in mid-July, before global financial markets took a hit in recent days over concerns about the health of China’s economy.

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:

Tuesday, September 1, 2015

Government Bond Auctions

Date Time Country

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep