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EUR/USD Fundamental Analysis December 31, 2012, Forecast

By:
Barry Norman
Updated: Aug 21, 2015, 02:00 UTC

Analysis and Recommendations: The EUR/USD declined to trade at 1.3222 losing 16pips. Markets remain worried about the US Fiscal Cliff, with President

EUR/USD Fundamental Analysis December 31, 2012, Forecast
EUR/USD Fundamental Analysis December 31, 2012, Forecast
EUR/USD Fundamental Analysis December 31, 2012, Forecast

Analysis and Recommendations:

The EUR/USD declined to trade at 1.3222 losing 16pips. Markets remain worried about the US Fiscal Cliff, with President Obama summoning Congressional Leaders to the White House, to push negotiations forward. Headline risk is likely to remain a driver of FX markets in the near term, as evidenced by yesterday’s response to comments from Senate Majority Speaker Reid and subsequently news of a House session planned for December 30th. Markets have responded, with measures of risk retracing their early 2012 declines.

The euro is weaker, down 0.5%.  Headlines out of the US will likely continue to impact movement in the near term though market reactions to news of sovereign debt auction results and issuance schedules have also impacted EUR over the past two European sessions.

The euro declined as traders sold off to take profits ahead of year end as the euro was at recent highs. Although analysts partly attributed the euro’s drop to year-end dollar demand and thin liquidity, they said unwinding of long euro positions were weighing on the currency.

The euro has trended higher since mid-November, gaining around 5 percent in a month to hit an 8-1/2 month high of $1.33085 on Dec. 19 as worries around the euro zone crisis eased.

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

Markets will have a shortened day on Monday December 31st and most are closed on Tuesday January 1, 2013. Our analysis will be published as markets close on Monday and there will be no analysis on Tuesday. I want to wish all of my readers a happy and healthy new year. I hope you continue reading our analysis next year.

 Economic Data December 28, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Dec. 28

 

EUR

 

 

French Consumer Spending (MoM) 

0.2%

 

0.1% 

 

-0.1% 

   

 

 

EUR

 

 

French GDP (QoQ) 

0.1%

 

0.2% 

 

0.2% 

 

 

 

 

SEK

 

 

Swedish Retail Sales (MoM) 

0.30%

 

0.20% 

 

-1.80% 

   

 

 

EUR

 

 

Italian 10-Year BTP Auction 

4.48%

 

 

 

4.45% 

 

 

 

 

USD

 

 

Chicago PMI 

51.6 

 

51.0 

 

50.4 

 

 

 

 

USD

 

 

Pending Home Sales (MoM) 

 1.7%

 

1.0% 

 

5.2% 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP, CAD and USD

Date

Time

Country

Event

Forecast

Previous

Jan. 01

01:00

CNY

Chinese Manufacturing PMI 

 

50.60 

Jan. 02

00:00

EUR

German CPI (MoM) 

0.7% 

-0.1% 

 

00:00

EUR

German CPI (YoY) 

1.9% 

1.9% 

 

08:00

CHF

KOF Leading Indicators 

1.38 

1.50 

 

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