EUR/USD Fundamental Analysis – August 31, 2015 – Forecast

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Updated: Aug 28, 2015, 14:06 UTC

Analysis and Recommendations: The EUR/USD was flat at 1.1246 with little data except for German inflation which printed a bit better than expected. The

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EUR/USD Fundamental Analysis – August 31, 2015 - Forecast

Analysis and Recommendations:

The EUR/USD was flat at 1.1246 with little data except for German inflation which printed a bit better than expected. The dollar pared its weekly advance against the euro as European stocks and US equity-index futures failed to sustain a recovery from a worldwide selloff.

Even with Friday’s drop, the greenback was higher versus all its Group-of-10 peers except the yen this week as stocks recovered some ground from the rout, and accelerating growth fueled speculation the US economy will be resilient to a slowdown in China. Traders rebuilt bets that the Federal Reserve will raise interest rates by the end of 2015.

Kansas City Fed president Esther George said Thursday it was too soon to tell whether market volatility will affect the US economy, and every policy-setting meeting is a live option to start raising rates.

“At this point, for me, I have not seen something that would change my own sense of how the economy is doing,” George said from Jackson Hole, Wyoming. “I thought there was scope to consider rate increases before now, but we’ll wait and see what the committee’s thoughts are.”

A JPMorgan Chase & C. measure of currency volatility climbed to the highest level since March on August 24.

The US economy expanded at a 3.7 percent annualized rate last quarter, exceeding all estimates of economists surveyed by Bloomberg, a report showed Thursday. Amid the stock-market price swings, Fed Bank of New York President William Dudley said on August 26 the case for raising US interest rates in September was less compelling.

Traders have increased to 56 percent the odds the Federal Reserve will raise interest rates by or at its December meeting from as low as 46 percent on Tuesday. The probability for the September meeting was 30 percent. The calculation is based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase.

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
JPY	Household Spending (YoY) (Jul)	-0.2%	1.3%	-2.0%
JPY	Household Spending (MoM) (Jul)	0.6%	2.2%	-3.0%
JPY	Jobs/applications ratio (Jul)	1.21	1.19	1.19
JPY	National Core CPI (YoY) (Jul)	0.0%	-0.2%	0.1%
JPY	Tokyo Core CPI (YoY) (Aug)	-0.1%	-0.2%	-0.1%
JPY	Retail Sales (YoY) (Jul)	1.6%	1.1%	0.9%
CHF	GDP (YoY) (Q2)	1.2%	0.9%	1.2%
CHF	GDP (QoQ) (Q2)	0.2%	-0.1%	-0.2%
EUR	Spanish CPI (YoY) (Aug)	-0.4%	-0.1%	0.1%
EUR	Spanish HICP (YoY) (Aug)	-0.5%	-0.2%	0.0%
GBP	Business Investment (QoQ) (Q2)	2.9%	1.7%	2.0%
GBP	GDP (YoY) (Q2)	2.6%	2.6%	2.6%
GBP	GDP (QoQ) (Q2)	0.7%	0.7%	0.7%
EUR	German CPI (MoM) (Aug)	0.0%	-0.1%	0.2%
USD	Core PCE Price Index (YoY) (Jul)	1.2%	1.3%	1.3%
USD	Core PCE Price Index (MoM) (Jul)	0.1%	0.1%	0.1%
USD	Goods Trade Balance (Jul)	-59.12B		-62.26B
USD	Personal Spending (MoM) (Jul)	0.3%	0.4%	0.3%
CAD	RMPI (MoM) (Jul)	-5.9%	-4.0%	0.2%

Upcoming Economic Events that you should be monitoring:

Monday, August 31, 2015

Cur.	Event	Actual	Forecast	Previous
	United Kingdom – Summer Bank Holiday
NZD	Building Consents (MoM) (Jul)			-4.1%
JPY	Industrial Production (MoM) (Jul)			1.1%
AUD	HIA New Home Sales (MoM) (Jul)
AUD	Company Gross Operating Profits			0.2%
AUD	Private Sector Credit (MoM) (Jul)			0.4%
CHF	KOF Leading Indicators (Aug)			99.8
EUR	CPI (YoY) (Aug)		0.2%	0.2%
CAD	Current Account (Q2)			-17.5B
USD	Chicago PMI (Aug)		54.5	54.7