EUR/GBP Weekly Fundamental Analysis June 2 – 6, 2014 Forecast

Weekly Analysis and Recommendations

The EUR/GBP closed the week at 0.8133 a bit higher than the open as the euro recovered and the pound eased this week. Investors expect the ECB to cut one or more of its key interest rates or make other changes to monetary policy on June 5 that would hurt the euro. But traders, uncertain about the extent of ECB action, bought euros on Friday to protect themselves against the possibility that the bank wouldn’t go far enough.

The pound has risen more than 10 percent against a basket of currencies in the past 12 months on the back of expectations that an improving economy would force the Bank of England to raise interest rates faster than its euro zone and U.S. peers.

 The BoE is likely to leave its monetary policy settings unchanged at its June meeting. Over the past month, the economy has evolved broadly in line with expectations. Although Q1 GDP growth had not been revised upwards to meet MPC expectations, the expenditure breakdown revealed that business investment picked up at the fastest rate in a year and that the increase in household consumption, still the major contributor to GDP, was based on greater compensation of employees. This provides evidence that growth is becoming more sustainable. However, GDP is still below its pre-crisis level and the MPC is unanimous that there remains scope for further slack to be eroded before monetary policy is tightened. A wait-and-see attitude is set to continue in the coming months as the MPC refines its views.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Historical: From 2011 to Present

Highest: 0.9084 EUR on Jul 01, 2011

Average: 0.8351 EUR over this period.

Lowest: 0.7758 EUR on July 22, 2012

Major Economic Events for the week of May 26 – 30 actual v. forecast for Euro, GPB, and USD

 

Economic Highlights of the coming week that affect the Euro, GBP and the USD

Government Bond Auction

Date Time Country 

Jun 03 00:30 Japan

Jun 03 09:15 Austria

Jun 03 09:30 Belgium

Jun 03 09:30 UK

Jun 03 14:30 UK

Jun 04 09:03 Sweden

Jun 04 09:30 Germany

Jun 04 10:00 Norway

Jun 05 00:30 Japan

Jun 05 08:30 Spain

Jun 05 08:50 France