EUR/GBP Fundamental Analysis Jan. 19, 2012, Forecast
Economic Events: (GMT)
There are no economic events scheduled in the UK
09:00 EUR ECB Monthly Report
The European Central Bank’s (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.
Analysis and Recommendations:
There are support and resistance levels are S: 0.822 0.8243 0.8276
R: 0.8332 0.8355 0.8388
Sterling dropped against the euro with EUR/GBP at 0.8320. (.16%) The euro rose to a three-day high against the gbp moved by speculation that the International Monetary Fund is looking at ways to expand its lending resources to USD1 trillion, from the existing USD385 billion.
With the euro artificially inflated this is a definite sell situation, as the euro will not maintain its strenght.
The jobless report from the U.K. gave some support to the duo as claims for the month of December recorded a drop to 1.2 thousands compared with 3.0 thousands in November,which was furtherrevised down to 0.002 , ILO unemployment for the three months ended November climbed to 16-year high to 8.4%, exceeding both prior and median forecasts of 8.3%. Tomorrow will be unemployment reports in the US. If these figures are at or above forecast we could see the USD rally against the GBP. Although most of the movement will be from EU news and rumors as it was today.
Fact or fiction, dreams or reality, rumors or news, which ever this is, it is the driving forces in the currency markets this afternoon. The International Monetary Fund (IMF) is planning to expand its lending capacity to $1 trillion from the current $385 billion to protect the global economy from the negative consequences of the European debt crisis, according to an official at a Group of 20 nations.
The question is will they be able to find contributions to do so, and how would these contributions be limited to the EU. The IMF charter requires assistance to all countries. How would the US veto power work in this instance? Today’s report contains no facts just a fact that a discussion will be held.
The big story unfolding is in Greece where Prime Minister Lucas Papademos said he would consider raising legislation to force a private-sector haircut on the debt if a deal can’t be reached voluntarily. Greek talks remained stalled as it is becoming more and more obvious that Greece will sooner or later default regardless of the negotiations and this temporary solution.
The european currency was propped up when Reuters reported that an analyst at Fitch said the agency did not expect Italy to default.
Originally posted here
