EUR/USD Fundamental Analysis December 6, 2012, Forecast

Analysis and Recommendations:

The EUR/USD is trading at 1.3062 dipping after EU retail sales plummeted well below forecast. Retail sales printed at -1.2% when forecast called for a drop of 0.1%. After reaching a new 7-week high early in the European session, the euro has dropped back below 1.31 as a weaker than expected Spanish auction sent a concerning message to markets. In addition, as plans for a banking union face increasing hurdles, the market risks becoming frustrated. Yesterday’s rumors that Moody’s was preparing to downgrade Germany weighed only temporarily on the currency. Germany is rated AAA/stable by both S&P and Fitch, with Moody’s holding a negative outlook. We do not expect an imminent downgrade. Today, stronger than expected German PMI services, rising to 49.7, is offset by weaker French and Italian releases, falling to 45.8 and 44.6 respectively. markets had tunnel vision on Europe, the US election and subsequently the fiscal cliff; however over the last two weeks this has shifted, slow but real progress in Europe, encouraging economic data from China and the US, some comfort with the expectation for a last minute fiscal cliff deal have turned attentions back to the core FX theme.

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

Economic Data December 5, 2012 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

Dec 06 01:30 Japan 

Dec 06 09:50 France 

Dec 06 16:00 US 

Dec 07 16:30 Italy