EUR/GBP Fundamental Analysis June 18, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

The EUR/GBP saw the sterling move up against the euro, to trade at 0.8074.

The UK trade balance report came in well under forecast at -10.1 billion, which limited moves by the pound. Sterling has added a small gain from yesterday’s close following the announcement of funding programs from the UK. On Thursday evening, BoE Governor King announced several new measures to help reduce borrowing costs in the UK. These include both a ‘funding for lending’ program that would lower borrowing costs for banks that ‘expand or sustain’ their loans to nonfinancial sector borrowers in the UK and also the deployment of the Extended Collateral Term Repo Facility (announced last December) that will provide banks with liquidity for a term of 6 months, on an ongoing basis.

Governor King also stated that these measures could be deployed in concert with additional QE, driving considerable weakness in GBP relative to its peers. Lastly, the release of weaker trade data had little impact on sterling given the market’s focus on the BoE’s announcement.

The euro is up against the US dollar but the weakness is from the USD as investors are moving to gold and other safe havens as poor eco data continues to worry the markets. Therefore the strength has not passed from the euro to its trading partners.

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 June 15, 2012 actual v. forecast

Date	Currency	Event	Actual	Forecast	Previous
Jun. 15	JPY	Interest Rate Decision	0.10%	0.10%	0.10%
GBP	Trade Balance	-10.1B	-8.5B	-8.7B
EUR	Employment Change (QoQ)	-0.2%	-0.2%	-0.3%
CAD	Manufacturing Sales (MoM)	-0.80%	1.00%	1.90%
USD	NY Empire State Manufacturing Index	2.3	13.0	17.1

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date	Time	Currency	Event	Forecast	Previous
Jun 18	18th-22nd	GBP	Nationwide Consumer Confidence	45	44
Day 1	ALL	G20 Meetings
Jun 19	8:30	GBP	CPI y/y	3.0%
	9:00	EUR	ZEW Economic Sentiment	-2.4
	12:30	USD	Building Permits	0.72M
	12:30	USD	Housing Starts	0.72M
	Day 2	ALL	G20 Meetings
Jun 20	6:00	EUR	German PPI m/m	0.2%
	8:30	GBP	Claimant Count Change	-13.7K
	8:30	GBP	MPC Meeting Minutes	0-0-9	0-0-9
	8:30	GBP	Unemployment Rate	8.2%
	9:00	CHF	ZEW Economic Expectations	-4.0
	14:30	USD	Crude Oil Inventories	-0.2M
	16:30	USD	FOMC Statement
	16:30	USD	Federal Funds Rate
	18:00	USD	FOMC Economic Projections
	18:15	USD	FOMC Press Conference
Jun 21	6:00	CHF	Trade Balance	1.33B
	7:00	EUR	French Flash Manufacturing PMI	44.7
	7:00	EUR	French Flash Services PMI	45.1
	7:15	CHF	Industrial Production q/q	7.9%
	7:30	EUR	German Flash Manufacturing PMI	45.2
	7:30	EUR	German Flash Services PMI	51.8
	8:00	EUR	Current Account	9.1B
	8:00	EUR	Flash Manufacturing PMI	45.1
	8:00	EUR	Flash Services PMI	46.7
	8:30	GBP	Retail Sales m/m	-2.3%
	10:00	GBP	CBI Industrial Order Expectations	-17
	12:30	USD	Unemployment Claims	386K
	13:00	USD	Flash Manufacturing PMI	54.0
	14:00	USD	Existing Home Sales	4.62M
	14:00	USD	Philly Fed Manufacturing Index	-5.8
Jun 22	8:00	EUR	German Ifo Business Climate	106.9
	All Day	EUR	ECOFIN Meetings
	13:00	EUR	Belgium NBB Business Climate	-11.2

Click here for further EUR/GBP Forecast.

Originally posted here