By FXEmpire.com
Introduction: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to wider ranges. The GBP is does not seem to move in response to the EUR as directly currently. The UK austerity program vs. The EU debt crisis seems to have them moving in opposing distances. They are developing new trading personalities and there is a good deal of profit to be made trading this pair. They can be volatile.
- The interest rate differential between the European Bank(ECB) and the Bank of England(BoE)
- European and UK economic data
- Growth differentials between the Euro zone and UK
Weekly Analysis and Recommendations
The EUR/GBP maintained its strength giving a big back at the end of the week to close at 0.8102
The Pound remained broadly unchanged against the Euro and the Australian Dollar; however, the report showed that growth in services was still well above the line that would indicate contraction. There is speculation that the GDP figures will be revised higher for the first quarter and the data, although not ideal, doesn’t do anything to discourage that.
The Pound also stood firm as the business expectations component of the services data rose to the highest level in 25-months, as hiring intentions also strengthened. Although there was still a high degree of uncertainty, the net result from this week’s surveys on manufacturing, construction and services has reduced expectation of further quantitative easing, which will help support the Pound.
After falling back in a technical recession this past week, the GBPhas done exceptionally well against the euro, which has been hit with a slew of poor eco data and political uncertainty along with a change in attitude from the ECB.
Major Economic Events for the past week actual v. forecast
|
AUD |
Interest Rate Decision |
3.75% |
4.00% |
4.25% |
|
USD |
ISM Manufacturing Index |
54.8 |
53.0 |
53.4 |
|
USD |
ADP Nonfarm Employment Change |
119K |
177K |
201K |
|
NZD |
Unemployment Rate |
6.7% |
6.3% |
6.4% |
|
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
USD |
Initial Jobless Claims |
365K |
380K |
392K |
|
USD |
Nonfarm Payrolls |
115K |
170K |
154K |
|
USD |
Unemployment Rate |
8.1% |
8.2% |
8.2% |
|
Ivey PMI |
52.7 |
61.0 |
63.5 |
Historical:
Highest: 1.2336 EUR on 29 Jun 2010.
Average: 1.1548 EUR over this period.
Lowest: 1.0686 EUR on 13 Oct 2009
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
May 7 |
7:00 |
CHF |
Foreign Currency Reserves |
237.5B |
|
7:15 |
CHF |
CPI m/m |
0.6% |
|
|
May 10 |
8:30 |
GBP |
Manufacturing Production m/m |
-1.0% |
|
11:00 |
GBP |
Official Bank Rate |
0.50% |
|
|
12:30 |
USD |
Trade Balance |
-46.0B |
|
|
12:30 |
USD |
Unemployment Claims |
365K |
|
|
May 11 |
8:30 |
GBP |
PPI Input m/m |
1.9% |
|
12:30 |
USD |
PPI m/m |
0.0% |
|
|
13:55 |
USD |
Prelim UoM Consumer Sentiment |
76.4 |
Upcoming Government Bond Auctions
Date Time Country
May 08 09:15 Austria
May 08 09:30 Belgium
May 08 14:30 UK
May 08 15:30 Italy
May 08 17:00 US
May 09 09:10 Sweden
May 09 09:30 Germany
May 09 09:30 Swiss
May 09 09:30 UK
May 09 14:30 Sweden
May 09 15:30 Italy
May 09 17:00 US
May 10 15:00 US
May 10 17:00 US
May 11 09:10 Italy BOT auction
May 11 10:00 Belgium
Originally posted here
