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

Analysis and Recommendations:

The EUR/GBP added 26 points as the pound weakened and the euro regained some momentum. The pair is holding at 0.7316. With an imminent boost to rates no longer on the horizon, investors are pouring into the euro instead of the pound.  The euro had been hit on Thursday after the European Central Bank chief Mario Draghi flagged downside risks to the euro zone economy and inflation and kept the door open for more quantitative easing.

Draghi’s dovish stance was a contrast to BoE Governor Mark Carney, who said on Saturday that while a slowdown in China’s economy could push down inflation, it did not change, for now, the BoE’s position on when and how it might raise rates.

Sterling, however, failed to gain much traction, especially since data on Thursday showed Britain’s dominant services sector grew at its weakest pace in more than two years in August. Manufacturing and construction sector surveys also fell short of expectations, prompting some economists for forecast a slower growth in the third quarter.

The euro fell one per cent yesterday on a darkening Eurozone outlook, while global stock markets rallied as the European Central Bank chief pledged to beef up or prolong the bank’s economic stimulus if necessary. Oil prices also rose, following the rally in equities.

ECB President Mario Draghi’s comments on the bank’s bond-buying program came as the bank cut its inflation and growth forecasts for the Eurozone, although he said no one on the bank’s Governing Council had argued to add to the program now. That helped to calm some jitters after weeks of market turmoil as investors gauge whether global monetary policy will be kept loose as central banks try to mitigate the recent market turmoil stemming from growing worries about 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:

Monday, September 7, 2015

Government Bond Auctions

Date Time Country

Sep 08 09:30 UK Auctions 3.5% 2045 Gilt

Sep 08 15:30 Italy Announces details of BTP/CCTeu on 11 Sep

Sep 08 17:00 US Holds 3-year note auction

Sep 09 09:15 Norway Holds bond auction

Sep 09 09:30 Germany Eur 4bn Aug 2025 Bund

Sep 09 17:00 US Holds 10-year note auction

Sep 10 17:00 US Holds 30-year bond auction

Sep 10 09:10 Italy Auctions BTPs/CCTeus