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EUR/USD Monthly Fundamental Forecast October 2014

By:
Barry Norman
Updated: Aug 24, 2015, 22:00 UTC

Outlook and Recommendation The EUR/USD  closed the month on a down note well below its average trading range after the release of disappointing eurozone

EUR/USD Monthly Fundamental Forecast October 2014

EUR/USD Monthly Fundamental Forecast October 2014
EUR/USD Monthly Fundamental Forecast October 2014
Outlook and Recommendation

The EUR/USD  closed the month on a down note well below its average trading range after the release of disappointing eurozone PMI and inflation data. The pair closed the month at 1.2630.The steady improvement in the US macroeconomic outlook is at the core of the sustained outperformance of the US dollar (USD) against major peer currencies, compounded by the bullish directional trend in US$-denominated securities markets. Following a strong second quarter (expanding at an annualized rate of 4.6%), the US economy is well positioned to grow by 2.1% this year before accelerating to a 3.2% growth rate in 2015. Heightened geopolitical tension in both Europe and the Middle East has not, thus far, had any material impact on our currency market view, but remains the core risk. Divergent monetary policies amongst major central banks in developed economies remain a core factor swaying capital flows in foreign exchange markets.

The directional shift towards a depreciating euro (EUR) should remain in place throughout the latter part of the year and well into the early months of 2015. Persistent structural weakness affecting a recovery in employment and domestic activity within the eurozone will keep the European Central Bank (ECB) on the defensive, prolonging a near-zero interest rate environment

The EUR is expected to trend lower this year and next as the alignment of both macroeconomic fundamentals and flows work against the currency

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(4 Hours)20141001060858

Upcoming Economic Events that you should be monitoring:

Cur.                       Event    

Wednesday, October 1

                 CNY                    Manufacturing PMI                                                       

                 EUR                    German Manufacturing PMI                                                      

                 GBP                     Manufacturing PMI                                                       

                 USD                    ADP Nonfarm Employment Change                                                        

                 USD                    ISM Manufacturing PMI                                               

Thursday, October 2

                 GBP                     Construction PMI                                                          

                 EUR                    Interest Rate Decision                                                  

Friday, October 3

                 GBP                     Services PMI                                                    

                 USD                    Nonfarm Payrolls                                                          

                 USD                    Unemployment Rate                                   

                 USD                    ISM Non-Manufacturing PMI                                                     

Monday, October 6

                 CAD                    Ivey PMI                                                                          

Tuesday, October 7

                 GBP                     Manufacturing Production (MoM)                                          

Thursday, October 9

                 GBP                     Interest Rate Decision                                                

Friday, October 10

                 CAD                    Employment Change                                                  

Monday, October 13

                 CNY                    Trade Balance                                               

Tuesday, October 14

                 EUR                    German ZEW Economic Sentiment                                                                         

Wednesday, October 15

                 CNY                    CPI (YoY)                                                         

                 GBP                     Average Earnings Index +Bonus                               

Thursday, October 16

12:00       EUR                    CPI (YoY)                                                                          

Friday, October 17

15:30       CAD                    Core CPI (MoM)

Government Bond Auction

Date Time Country 

Oct 01 11:03 Sweden Bond auction

Oct 01 11:30 Germany Eur 5.0bn Aug 2024 Bund auction

Oct 01 11:30 UK Auctions 2% 2020 Gilt

Oct 02 10:30 Spain Bono/Obligacion auction

Oct 02 17:00 US Announces details of 3/10Y Note

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