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EUR/USD Fundamental Analysis – August 26, 2015 – Forecast

By:
Barry Norman
Updated: Aug 25, 2015, 15:11 UTC

Analysis and Recommendations: The EUR/USD fell 154 points reversing gains as trading returned to some normalcy as the PBOC stepped in to support the

EUR/USD

EUR/USD Fundamental Analysis – August 26, 2015 – Forecast
EUR/USD Fundamental Analysis – August 26, 2015 – Forecast
Analysis and Recommendations:

The EUR/USD fell 154 points reversing gains as trading returned to some normalcy as the PBOC stepped in to support the markets. The euro is now at 1.1465. The People’s Bank of China announced today a 25 bps cut in the one-year benchmark lending rate to 4.6%, a 25 bps cut in the one-year benchmark deposit rate and a 50 bps lowering of reserve requirements for most big banks, in a move aimed to support the stuttering economy and plunging stock market.

The German Economy Minister said good economic conditions in Germany will continue helped by favorable European trends and a lower oil price, adding that he was not worried about the impact of the developments in China.

“Black Monday” is followed by “Turnaround Tuesday”. After three consecutive sessions of huge China-driven losses, European stocks gain around 5% while commodities rebound. Core bonds suffered a significant setback with Bunds underperforming. At the time of writing, the German yield curve bear steepens with yields 1.4 bps.

The German IFO business climate indicator rose for a second straight month in August, while the consensus was looking for a limited decline. The headline index rose from 108.0 to 108.3, reaching its highest level in three months. Looking at the details, the improvement was based in the current assessment sub-index while the expectations index weakened slightly, from 102.3 to 102.2.

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:

Cur.

 

Event

Actual

Forecast

Previous

 

  NZD

 

Inflation Expectations (QoQ)

1.9%

 

1.9%

 

 

  EUR

 

German GDP (YoY) (Q2)

1.6%

1.6%

1.6%

 

 

  EUR

 

German GDP (QoQ) (Q2)

0.4%

0.4%

0.4%

 

 

  CHF

 

Employment Level (Q2)

4.240M

4.240M

4.225M

 

 

  CNY

 

PBoC Interest Rate

4.60%

 

4.85%

 

 

  CNY

 

PBOC Reserve Requirement Ratio

18.00%

 

18.50%

 

 

  USD

 

S&P/CS HPI Composite

5.0%

5.1%

4.9%

   

 

eurusd tues

Upcoming Economic Events that you should be monitoring:

Wednesday, August 26, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  USD

 

API Weekly Crude Oil Stock

 

 

-2.300M

 

 

  NZD

 

Trade Balance (YoY) (Jul)

 

-2,528M

-2,850M

 

 

  NZD

 

Trade Balance (MoM) (Jul)

 

-600M

-60M

 

 

  AUD

 

Construction Work Done (QoQ)

 

-1.5%

-2.4%

 

 

  AUD

 

RBA Governor Stevens Speaks  

 

 

 

 

 

  GBP

 

BBA Mortgage Approvals

 

46.0K

44.5K

 

 

  USD

 

Core Durable Goods Orders

 

0.4%

0.6%

   

  USD

 

Durable Goods Orders (MoM)

 

-0.4%

3.4%

 

 

  USD

 

FOMC Member Dudley Speaks  

 

 

 

 

 

  USD

 

Crude Oil Inventories

 

 

2.620M

   

Government Bond Auctions

Date Time Country

Aug 25 00:00 UK Announces details of Jan 2021 gilt

Aug 25 17:30 Italy Announces details of BTP/CCTeu on 28 Aug

Aug 25 19:00 US Holds 2-year note auction

Aug 26 11:10 Italy Eur 3bn 0.15% Aug 2017 CTZ

Aug 26 19:00 US Holds 2-year FRN note auction

Aug 26 12:05 Norway Holds bond auction

Aug 26 19:00 US Holds 5-year note auction

Aug 26 19:00 US Holds 2-year FRN auction

Aug 27 11:03 Sweden Sek 0.5bn 0.125% I/L Jun 2019, Sek 0.5bn 1% Jun 2025 bonds

Aug 27 19:00 US Holds 7-year note auction

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep

 

 

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