By FXEmpire.com
Outlook and Recommendation
The EUR/GBP ended May at 0.8029. The euro is weak but so is the pound, coming off of comments from the IMF pushing the BoE to act quickly to support the ailing economy. Last month’s GDP was revised downwards, making the technical recession a deeper one than first thought. The pair ended the month in the middle of the range as shown below.
The negativity of the euro remains strong, but the UK economy is suspect and investors are shying away.
Ongoing financial instability and deteriorating confidence will dampen growth, particularly in the periphery. Notwithstanding the better than-expected result registered by the euro area economy in the first quarter, we have lowered our expectations for 2012-13. We now project a contraction of 0.6% this year to be followed by growth of just 0.7% next year.
Whereas in the UK the annual inflation rate came down considerably in April, from 3.5% y/y to 3.0%, and we expect the rate to dip again in the third quarter before ending the year around 3%. With downside risks to both growth and inflation having materialized in the first half of the year, we see a sizeable probability of additional QE in the months ahead.
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.
Central Bank Name: Bank of England
Date of next meeting or last meeting: Jun 07
Current Rate: 0.50 % (- 0.50) at the time of this writing the BoE met and held rates.
Statement highlights of last meeting: The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its program me of asset purchases totaling ?325 billion financed by the issuance of central bank reserves. The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of ?50 billion to a total of ?325 billion on 9 February 2012.
Historical:
Highest: 1.2336 EUR on Jun 29, 2010.
Average: 1.1548 EUR over this period.
Lowest: 0.7950 EUR on May 16, 2012
Economic events for the month of June affecting EUR, CHF, GBP and USD
|
Time |
Cur. |
Event |
Forecast |
Previous |
||||
|
Friday, June 01 |
||||||||
|
12:30 |
USD |
8.1% |
8.1% |
|||||
|
12:30 |
USD |
150K |
115K |
|||||
|
14:00 |
USD |
53.9 |
54.8 |
|||||
|
Wednesday, June 06 |
||||||||
|
11:45 |
EUR |
1.00% |
1.00% |
|||||
|
Thursday, June 07 |
||||||||
|
11:00 |
GBP |
0.50% |
||||||
|
Thursday, June 14 |
||||||||
|
07:30 |
CHF |
0.25% |
||||||
|
Wednesday, June 20 |
||||||||
|
08:30 |
GBP |
-13.7K |
||||||
|
Thursday, June 21 |
||||||||
|
08:30 |
GBP |
-1.1% |
||||||
|
08:30 |
GBP |
-2.3% |
||||||
Click here to read EUR/GBP Technical Analysis.
Originally posted here
