EUR/USD Fundamental Analysis March 19, 2013 Forecast

Analysis and Recommendations:

The EUR/USD recovered a bit of its weakness but remains well into negative territory, trading at 1.2946 down by 130 pips but off the low at 1.2903 hit in Asian trading. The euro is down 0.9%, has touched a 4‐month low and is trading back below 1.30 as the market focuses on Cyprus. A bailout has been widely anticipated; however the structure of it, particularly the levy on deposits, has proven a negative surprise. A €10bn bailout accompanied by an increase in corporate tax and a bank deposit levy (set at 6.7% for deposits below €100k; 9.9% for deposits between €100k and €500k; and 15% above €500k) will be voted in parliament tomorrow. Cyprus has been a favored destination of Russian funds, leaving them particularly vulnerable. Estimates show that there is in access of 20 billion euro in Russian deposits. The path Cyprus has chosen and the risk of a bank run has increased contagion fears, weakened the EUR, increased yields on the more vulnerable European bond markets and helped to send the German 2‐year yield back down to 0.0%.

Depositors and consumers have broken into protests on the streets of the small island, while worries have now spread all across the eurozone as depositors no longer feel safe in regards to their own banking systems. This move has shaken the belief in banks and threatens a European Bank Break Down.

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 March 18, 2013 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

Mar 19 09:30 Spain

Mar 20 10:10 Sweden

Mar 20 10:30 Germany

Mar 20 10:30 Portugal

Mar 21 09:30 Spain

Mar 21 09:50 France

Mar 21 10:30 UK

Mar 21 10:50 France

Mar 21 16:30 Italy

Mar 21 16:00 US

Mar 21 18:00 US

Mar 22 16:30 Italy