EUR/GBP Fundamental Forecast – January 15, 2016

Analysis and Recommendations:

The EUR/GBP soared 41 points as the euro climbed today and the pound eased ahead of the Bank of England meeting. There are also ECB minutes due later in the session. Traders are hoping for a comment from MPC members regarding outlooks for future rate increases. The pair moved to trade at 0.7589.

Oil slumping, to around 30 US dollars a barrel, will do little to push inflation up from its ultra-low level of 0.1%, keeping consumer prices competitive.

Last month, the ONS revealed shock revisions that showed growth of 0.4% in the third quarter to the end of September, down from the initial estimate of 0.5%. Growth was also revised down to 0.5% for the second quarter to the end of June, from the 0.7% previously recorded.

Bank of England governor Mark Carney has already said a decision to raise rates in the US is ”not decisive” for UK policymakers, stressing any such move on these shores will be made according to UK economic conditions.

A number of economists have pushed their expectations of the first UK interest rate rise from the end of 2016 into the start of 2017.

MPC member Ian McCafferty has been the lone policymaker calling for a rise since August and is unlikely to be joined by fellow rate-setters this week.

The euro advanced for a second day and the yen pared a decline as a selloff in European stocks supported safer assets.

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:

Friday, January 15, 2016

Government Bond Auctions

Date Time and Country

Jan 14 10:30 Spain Auctions Bonos/Obligaciones

Jan 14 19:00 US Holds 30-year bond auction

Jan 14 N/A US Announces details of 10-yr TIPS auction on Jan 21

Jan 18 11:00 Belgium Holds OLO auction