By FXEmpire.com
EUR/GBP Weekly Fundamental Analysis April 16-20, 2012, Forecast
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
Analysis and Recommendations
The EUR/GBP fell on Friday, but for the week the euro is trading higher then Monday. The euro ended the week at 0.8252
|
Date |
Open |
High |
Change % |
||
|
04/13/2012 |
0.8252 |
0.8264 |
0.8268 |
0.8229 |
-0.15% |
|
04/12/2012 |
0.8264 |
0.8239 |
0.8270 |
0.8227 |
0.30% |
|
04/11/2012 |
0.8239 |
0.8246 |
0.8264 |
0.8234 |
-0.08% |
|
04/10/2012 |
0.8247 |
0.8241 |
0.8276 |
0.8234 |
0.07% |
|
04/09/2012 |
0.8241 |
0.8242 |
0.8257 |
0.8230 |
-0.01% |
EUR continues to show resilience in the face of a challenged outlook, entering the NA session in the mid 1.31s. A dovish Fed has helped support EUR, even as European bond markets suggest building stresses and the Spanish IBEX has dropped to an almost four year low. Today, the Bank of Spain released their March statistics, which showed that the ECB increased its lending to Spanish banks from EUR152bn in February to EUR228bn in March, a new record. Suggesting that the banking system remains vulnerable and that if any of these loans were used to buy Spanish sovereign debt the increase in yields will be generating mark to market losses. Do not expect EUR to collapse lower, supported by a limit to how much the USD can rally without stifling the US recovery.
Credit rating agency Standard & Poor’s says Britain has retained its top-notch AAA rating, adding that it regards the country’s economic outlook is stable.
The agency said on Friday that it anticipated Britain would see “relatively modest real GDP growth of about 1.6 per cent between 2012 and 2015?.
In other European news, inflation in Germany, Italy and Spain came in as expected providing some reassurance that next week’s Eurozone CPI will be close to the flash estimate of 2.6%. European finance ministers are hosting a May 2 meeting to discuss bank capital requirements
Major Economic Events for the past week actual v. forecast
|
Apr. 09 |
CNY |
Chinese CPI (YoY) |
3.6% |
3.3% |
3.2% |
|
Apr. 10 |
USD |
Fed Chairman Bernanke Speaks |
|||
|
JPY |
Interest Rate Decision |
0.10% |
0.10% |
0.10% |
|
|
JPY |
BoJ Press Conference |
||||
|
Apr. 12 |
Trade Balance |
0.3B |
2.0B |
2.0B |
|
|
USD |
Trade Balance |
-46.0B |
-52.0B |
-52.5B |
|
|
USD |
Initial Jobless Claims |
380K |
355K |
367K |
|
|
Apr. 13 |
CNY |
Chinese GDP (YoY) |
8.1% |
8.3% |
8.9% |
|
USD |
Core CPI (MoM) |
0.2% |
0.2% |
0.1% |
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, GPB, and the Franc
|
Apr. 16 |
08:15 |
CHF |
PPI (MoM) |
0.8% |
|
Apr. 17 |
09:30 |
GBP |
CPI (YoY) |
3.4% |
|
10:00 |
EUR |
CPI (YoY) |
2.6% |
|
|
10:00 |
EUR |
Core CPI (YoY) |
1.5% |
|
|
Apr. 18 |
09:30 |
GBP |
Average Earnings Index +Bonus |
1.4% |
|
09:30 |
GBP |
Claimant Count Change |
7.2K |
|
|
Apr. 19 |
08:30 |
EUR |
Dutch Unemployment Rate |
6.00% |
|
Apr. 20 |
09:00 |
EUR |
German Ifo Business Climate Index |
109.8 |
|
09:00 |
EUR |
German Current Assessment |
117.4 |
|
|
09:00 |
EUR |
German Business Expectations |
102.7 |
|
|
09:30 |
GBP |
Retail Sales (MoM) |
-0.8% |
Government Bond Auctions (this week)
Apr 16-30 n/a UK Re-opened 3.75% 2052 Conventional Gilt syndication
Apr 16 09:10 Slovakia Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds
Apr 16 09:10 Norway T-bill auction
Apr 17 08:30 Spain 12 & 18M T-bill auction
Apr 17 09:30 Belgium Auctions 3 & 12M T-bills
Apr 18 09:10 Sweden Nominal bond auction
Apr 18 09:30 Germany Eur 5.0bn 0.25% Mar 2014 Schatz
Apr 18 14:30 Sweden Details T-bill auction on Apr 25
Apr 19 08:30 Spain Obligacion auction
Apr 19 08:50 France BTAN auction
Apr 19 09:30 UK Auctions 0.125% I/L Gilt 2029
Apr 19 09:50 France OATi auction
Originally posted here
