EUR/USD Fundamental Analysis – January 6, 2016 – Forecast

Analysis and Recommendations:

The EUR/USD is nosediving losing 59 points in today’s session to trade at 1.0772. Analysts are once again talking about parity with the US dollar. The Eurozone’s embattled currency will soon be worth less than the US dollar for the first time in more than 13 years, analysts at Bank of America Merrill Lynch have predicted.

Athanasios Vamvakidis, a foreign exchange strategist at the US bank, has said that the euro will fall to $0.95 by the end of the year, tumbling from $1.08 now. The euro has not been worth less than the dollar since late 2002, the Telegraph reported.

The single currency depreciated heavily throughout 2014, and sold off again last year, amid a worsening of the economic outlook for the euro area and the introduction of further monetary stimulus by the European Central Bank.

In an initial estimate, the European Union’s statistics agency found that annual consumer price inflation held steady at 0.2 percent. The rate was positive for a third month in a row but was below market expectations for a modest increase to 0.3 percent.

Energy prices were once again the cause for low inflation, which remains well below the European Central Bank’s target of just under 2 percent. They were down 5.9 percent on the year. Still, that drop was the smallest since July as the previous year’s slump in oil prices begins to fall out of the annual comparison.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

 

 

Upcoming Economic Events that you should be monitoring:

Wednesday, January 6, 2016

Government Bond Auctions

Date Time and Country

Jan 06 11:30 Germany Euro 5bn 0% Dec 2017 Schatz

Jan 06 n/a Netherlands Announces details of DSL auction on Jan 12

Jan 07 10:50 France Holds bond auction

Jan 07 11:30 UK GBP1.5bn 4% Jan 2060 Gilt

Jan 07 n/a US Announces details of 3-yr note auction on Jan 12

Jan 07 n/a US Announces details of 10-yr note auction on Jan 13

Jan 07 n/a US Announces details of 30-yr bond auction on Jan 14

Jan 08 17:20 Italy Announces details of BTP/

Jan 11 12:00 Norway Announces details of bond auction on Jan 13

Jan 12 11:00 Austria Holds bond auction

Jan 12 11:00 Netherlands Euro 1-1.5bn 2.5% 2033 DSL

Jan 12 11:30 UK 0.125% 2046 Inflation-linked Gilt

Jan 12 n/a UK Announces details of Gilt auction on Jan 20

Jan 12 19:00 US Holds 3-year note auction

Jan 13 11:05 Norway Holds bond auction

Jan 13 11:10 Italy Holds BTP

Jan 13 11:30 Germany Euro 5bn Feb 2026 Bund

Jan 13 19:00 US Holds 10-year note auction

Jan 14 10:30 Spain Auctions Bonos/Obligaciones (Linkers?)

Jan 14 19:00 US Holds 30-year bond auction

Jan 14 n/a US Announces details of 10-yr TIPS auction on Jan 21

Jan 18 11:00 Belgium Holds OLO auction