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EUR/USD Monthly Fundamental Forecast August 2015

By:
Barry Norman
Published: Aug 1, 2015, 07:51 UTC

Outlook and Recommendation The EUR/USD turned green towards the end of the month and will enter August at 1.0984. US dollar gains are expected to

EUR/USD - Bearish Pressure continues

eurusd monthly bns
Outlook and Recommendation

The EUR/USD turned green towards the end of the month and will enter August at 1.0984. US dollar gains are expected to intensify into year-end as market participants await the commencement of monetary policy normalization by the US Federal Reserve. Fed policymakers have become increasingly confident in the labor market outlook, with preference to an early and gradual path for monetary tightening; we anticipate the first benchmark interest rate increase to take place in September. A differentiated foreign exchange performance is expected to take place through 2016, with stabilization and modest strength anticipated for most currencies with the exception of the euro.

The US economy is showing signs of improving momentum on the back of better consumer and housing activity after a weak start to the year. Solid job growth, rising income gains, low gas prices, and pent-up demand should sustain the pickup in household spending into next year, while stronger sales are expected to provide a lift to business investment. Consumer confidence and spending remain well supported by strengthening job and income gains, cheaper gasoline prices, low borrowing costs, and rising stock market pricing and home values. Continued strong job growth has pushed the unemployment rate to a seven-year low of 5.3%, and alternative measures of labour market underutilization continue to improve. Auto sales are running at their highest level in a decade and major purchase plans are trending higher. US housing activity is also gaining traction, with both home sales and construction touching multi-year highs.

The euro fell 2% in July and is entering August at the mid-point of its range since March. Near term Greece risk has faded, and ongoing turbulence in China has highlighted the potential for safe-haven flows in periods of broader uncertainty. EUR sentiment remains overwhelmingly bearish with a sizeable $15.4bn short CFTC position as of mid-July. Downside risk is expected to rise into the end of August, with a renewed focus on challenging Greece negotiations and added pressure from the impending policy normalization at the Fed.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

EURUSD(60 minutes)20150801065808

Major Economic Events In August That You Should Be Monitoring:

Time

Cur.

 

Event

 

Forecast

Previous

 

 

Saturday, August 1, 2015

05:00

  CNY

 

Manufacturing PMI (Jul)

 

50.2

50.2

 

 

Monday, August 3, 2015

05:45

  CNY

 

HSBC Manufacturing PMI (Jul)

 

 

48.2

 

 

11:55

  EUR

 

German Manufacturing PMI (Jul)

 

51.5

51.5

 

 

12:30

  GBP

 

Manufacturing PMI (Jul)

 

51.6

51.4

 

 

18:00

  USD

 

ISM Manufacturing PMI (Jul)

 

53.5

53.5

 

 

Tuesday, August 4, 2015

05:30

  AUD

 

Retail Sales (MoM) (Jun)

 

0.5%

0.3%

 

 

08:30

  AUD

 

Interest Rate Decision (Aug)

 

2.00%

2.00%

 

 

12:30

  GBP

 

Construction PMI (Jul)

 

58.4

58.1

 

 

Wednesday, August 5, 2015

02:45

  NZD

 

Employment Change (QoQ) (Q2)

 

0.5%

0.7%

 

 

12:30

  GBP

 

Services PMI (Jul)

 

58.0

58.5

 

 

16:15

  USD

 

ADP Nonfarm Employment

 

215K

237K

 

 

18:00

  USD

 

ISM Non-Manufacturing PMI

 

56.2

56.0

 

 

Thursday, August 6, 2015

05:30

  AUD

 

Employment Change (Jul)

 

15.0K

7.3K

 

 

12:30

  GBP

 

Manufacturing Production

 

0.2%

-0.6%

 

 

15:00

  GBP

 

Interest Rate Decision (Aug)

 

0.50%

0.50%

 

 

Friday, August 7, 2015

16:30

  USD

 

Nonfarm Payrolls (Jul)

 

222K

223K

 

 

18:00

  CAD

 

Ivey PMI (Jul)

 

53.0

55.9

 

 

Saturday, August 8, 2015

06:00

  CNY

 

Trade Balance (Jul)

 

 

46.54B

 

 

Sunday, August 9, 2015

06:00

  CNY

 

CPI (YoY) (Jul)

 

 

1.4%

 

 

Tuesday, August 11, 2015

13:00

  EUR

 

German ZEW Economic

 

 

29.7

 

 

Wednesday, August 12, 2015

09:30

  CNY

 

Industrial Production (YoY) (Jul)

 

 

6.8%

 

 

12:30

  GBP

 

Average Earnings Index +Bonus

 

 

3.2%

 

 

12:30

  GBP

 

Claimant Count Change (Jul)

 

 

7.0K

 

 

Thursday, August 13, 2015

16:30

  USD

 

Core Retail Sales (MoM) (Jul)

 

0.4%

-0.1%

 

 

Friday, August 14, 2015

10:00

  EUR

 

German GDP (QoQ) (Q2)

 

 

0.3%

 

 

13:00

  EUR

 

CPI (YoY) (Jul)

 

 

0.2%

 

 

16:30

  USD

 

PPI (MoM) (Jul)

 

0.2%

0.4%

 

 

Tuesday, August 18, 2015

12:30

  GBP

 

CPI (YoY) (Jul)

 

 

 

 

 

Thursday, August 20, 2015

12:30

  GBP

 

Retail Sales (MoM) (Jul)

 

 

-0.2%

 

 

Friday, August 21, 2015

16:30

  CAD

 

Core CPI (MoM) (Jul)

 

 

 

 

 

16:30

  CAD

 

Core Retail Sales (MoM) (Jun)

 

 

0.9%

 

 

Monday, August 31, 2015

 

 

Holiday

United Kingdom – Summer Bank Holiday

 

 

 

 

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