EUR/USD Fundamental Analysis – August 19, 2015 – Forecast

Analysis and Recommendations:

The EUR/USD meandered today with little market action to trade at 1.1070.  The global economy is on course for muted growth this year and next as it faces risks from a slowdown in China, the prospect of higher interest rates in the US and the lingering threat of a Greek exit from the euro, according to the latest forecasts from Moody’s.

Outlining the list of potential shocks that could knock even modest expansion off course, the credit rating agency said it did not expect the world’s leading economies to shake off the legacy of the financial crisis and return to their former growth averages for the next five years.

Moody’s forecasts GDP growth for the G20 to slow to 2.7% this year, down from 2.9% in 2014. The agency is expecting only a slight pickup to 3% growth in 2016, according to its latest quarterly global outlook, which feeds into its ratings on countries’ sovereign debts.

“The recovery in the US and, to a lesser extent, the euro area and Japan, will be offset by the ongoing slowdown in China.

Economic growth in Germany is set to be “solid” in the second half of the year, the country’s central bank has said.

The Bundesbank said growth in the country would be boosted by both external and domestic demand.

Last week, Germany, Europe’s largest economy, reported that its economy grew 0.4% in the three months to June.

However, the Bundesbank noted that the China’s slowdown could add to uncertainty over growth prospects for the global economy. In its monthly report, the Bundesbank said that Germany would benefit from increases in real earnings domestically, as well as economic recovery in the eurozone.

Accelerating growth in the United States and Britain – two of Germany’s key trading partners – would also contribute to Germany’s growth.

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:

Wednesday, August 19, 2015

Government Bond Auctions

Date Time Country

Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz

Aug 19 11:03 Sweden Holds bond auction

Aug 20 10:30 Spain Auctions Bonos/Obligaciones

Aug 20 11:30 UK Auctions 4.25% 2036 Gilt

Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug