By FXEmpire.com
Analysis and Recommendations:
The EUR/GBP declined to 0.8007 from the opening at 0.8048 as the euro continued to lose strength, even with negative eco data in the UK and the IMF forewarning, the euro could not hold against the sterling.
Yesterday the IMF commented on the status of the UK economy and urged the BoE to consider drastic measures to stimulate growth. Today, retail sales reported well under forecast and as CBI Industrial Trends.
Minutes from the BoE’s May meeting indicated that there is not very much support for further QE, with the MPC voting 8-1 against amendments to the current program. Note that while the Bank didn’t physically deliver further unconventional policy ease at the May meeting, some aspects of the minutes and inflation projections are helping to keep policy conditions loose by teasing the market with the prospect of further action. Barring a disaster in Europe, however, it is unlikely that unconventional monetary policy measures will be taken because inflation is likely to continue to disappoint on the upside. Weak UK retail sales for April (-2.3% m/m with auto fuel, -1% ex-auto fuel) will continue to keep this possibility on the market’s mind.
Expectations for progress at today’s EU Summit in Brussels have been pared back after rumors circulating this past weekend suggested that the EU might take dramatic actions. There were rumors that the EU might socialize European debts by issuing so-called ‘Euro-bonds’ backed jointly and severally by its member states, rumors that further and even greater rescue funds might be forthcoming, rumors that the EU might make money from its various lending funds available for the bailing out of the European banking sector, etc.
With hope fading for significant action at today’s EU summit, risk aversion is rising amid fears that Europe and markets are unprepared for the downside risks posed by the crisis. Global growth forecasts continue be shift lower.
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 for May 23, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
May 23 |
JPY |
Trade Balance |
-0.48T |
-0.60T |
-0.62T |
|
JPY |
Interest Rate Decision |
0.10% |
0.10% |
0.10% |
|
|
GBP |
Retail Sales (MoM) |
-2.3% |
-0.8% |
2.0% |
|
|
GBP |
Retail Sales (YoY) |
-1.1% |
1.0% |
3.1% |
|
|
EUR |
Industrial New Orders (MoM) |
1.8% |
-0.1% |
-1.2% |
|
|
GBP |
CBI Industrial Trends Orders |
-17 |
-10 |
-8 |
|
|
Core Retail Sales (MoM) |
0.1% |
1.0% |
0.4% |
||
|
CAD |
Leading Indicators (MoM) |
0.3% |
0.3% |
0.3% |
|
|
CAD |
Retail Sales (MoM) |
0.4% |
0.4% |
-0.2% |
|
|
USD |
New Home Sales |
343K |
335K |
332K |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
May 24 |
6:00 |
CHF |
1.69B |
|
|
7:00 |
EUR |
46.9 |
||
|
7:00 |
EUR |
45.2 |
||
|
7:30 |
EUR |
46.2 |
||
|
7:30 |
EUR |
52.2 |
||
|
8:00 |
EUR |
109.9 |
||
|
8:00 |
EUR |
45.9 |
||
|
8:00 |
EUR |
46.9 |
||
|
8:30 |
GBP |
1.8% |
||
|
8:30 |
GBP |
-0.2% |
||
|
8:30 |
GBP |
31.9K |
||
|
8:30 |
GBP |
-3.3% |
||
|
12:30 |
USD |
|||
|
12:30 |
USD |
-4.0% |
||
|
13:00 |
EUR |
-10.7 |
||
|
May 25 |
6:00 |
EUR |
5.6 |
|
|
7:15 |
CHF |
4.04M |
||
|
TBD |
ALL |
|||
|
13:55 |
USD |
Government Bond Auctions (this week)
Date Time Country
May 24 15:30 Italy
May 24 17:00 US
May 25 15:30 Italy
Click here a current EUR/GBP Chart.
Originally posted here
