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EUR/GBP Fundamental Forecast – September 7, 2016
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The EUR/GBP fell 21 points as the pound continued to rally as traders watch Prime Minister May maneuver towards Brexit. UK data continues to be positive
The EUR/GBP fell 21 points as the pound continued to rally as traders watch Prime Minister May maneuver towards Brexit. UK data continues to be positive giving her strong support to move forward. The pair is trading at 0.8359. Speculators have trimmed record high bets against the pound in the week ended Aug. 30 and analysts said if investors roll back expectations of further monetary easing in coming months, sterling could advance further.
The Bank of England cut rates to near zero early last month and launched an asset purchase to cushion the economy from the shock decision to leave the EU.
On Monday, Morgan Stanley economists raised their growth forecasts for the United Kingdom and adjusted their BoE easing call, delaying the next tranche of asset purchases to Feb 2017.
In the space of a couple of months, sterling’s post-Brexit referendum slump to 30-year lows has been followed by a rally – and some analysts think that the U.K.’s currency will continue to build its strength.
Banks including Italy’s UniCredit are closing their short positions in sterling, sending the currency up 4 percent from its August low. Economists, seeing the rash of positive data on the U.K. economy restoring confidence that a recession is not yet imminent, are rushing to upgrade some of the gloomier forecasts for the 2016-17period.
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Upcoming Economic Events that you should be monitoring:
September 7, 2016
| Cur. | Event | Actual | Forecast | Previous | |||
| AUD | GDP (QoQ) (Q2) | 0.4% | 1.1% | ||||
| AUD | GDP (YoY) (Q2) | 3.2% | 3.1% | ||||
| GBP | Halifax House Price Index (MoM) (Aug) | -0.4% | -1.0% | ||||
| GBP | Halifax House Price Index (YoY) (Aug) | 7.0% | 8.4% | ||||
| GBP | Industrial Production (MoM) (Jul) | -0.3% | 0.1% | ||||
| GBP | Manufacturing Production (MoM) (Jul) | -0.4% | -0.3% | ||||
| GBP | NIESR GDP Estimate | 0.3% | |||||
| USD | JOLTs Job Openings (Jul) | 5.624M | |||||
| CAD | Interest Rate Decision | 0.50% | |||||
| CAD | Ivey PMI (Aug) | 57.0 | |||||
| USD | Beige Book |
Government Bond Auctions
Date Time Country Auction
Sep 07 10:30 Denmark Holds bond auction
Sep 07 11:03 Sweden Holds bond auction
Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund
Sep 08 11:00 Ireland Holds bond auction
Sep 08 17:20 Italy Announces details of bond auction
About the Author
Barry Normanauthor
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