EUR/GBP Fundamental Forecast – February 11, 2016

Analysis and Recommendations:

The EUR/GBP traded lower, dropping -0.0047, or -0.61% to .7755. Stronger equity markets in Europe and the U.S. helped drive down the Euro. The Euro was under pressure because it is a funding currency and tends to move lower when equities appreciate.

Some investors were on the sidelines ahead of U.S. Federal Reserve Chair Janet Yellen’s testimony before the House Committee on Financial Services. Her testimony is likely to affect all the financial markets and not just the U.S. Dollar or its equity markets.

If she is pessimistic about the economy then look for equity markets to break. This could be supportive for the EUR/GBP.

According to data released on Wednesday, Britain’s industrial production slumped 1% in December after warm weather forced a sharp decline in energy output and the low price hit North Sea oil producers. The decline meant that industrial output in the U.K. suffered its sharpest monthly drop in three years in December, official figures showed. The Office for National Statistics said industrial output fell 1.1% in December compared with a 0.8% fall in November.

The manufacturing sector suffered a further decline from an already weak November while mining and quarrying also dropped, fueling concerns that the slowdown in the U.S. and turmoil on global markets is undermining confidence across the U.K.’s major export industries. Manufacturing output fell 0.2% in December for the third month in a row.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Upcoming Economic Events that you should be monitoring: 

Thursday, February 11, 2016

 Government Bond Auctions

Date Time and Country

Feb 11 N/A Italy Euro 4-5bn 30-yr syndicated bond auction

Feb 11 11:03 Sweden Holds I/L bond auction

Feb 11 11:10 Italy Announces details of bond auction

Feb 11 11:30 UK 3.5% 2045 Gilt auction

Feb 11 19:00 US Holds 30-year bond auction

Feb 11 n/a US Details of 30-yr TIPS auction on Feb 18

Feb 12 11:10 France Details of bond auction on 18 Feb