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 declined most of the week as the euro slowly sunk back under the 1.23 level. The week started off with markets supportive of Mr. Draghi and the ECB and hopes that his plans would lead to immediate actions. After the disappointment on Thursday when the ECB offered no guidance or assistance in its monthly meeting and statement. Traders decided to support Mr. Draghi and pushed the euro upwards, and continue to support the currency in the earlier part of the week, by mid week traders had become restless and turned negative as the euro began to descend.

The GBP faced a week of disappointing eco data including a terrible trade balance release on Thursday. Earlier in the week retail sales reported under forecast and Industrial Production was down, but in the battle with the euro the sterling remained stronger.

Date

Last

Open

High

Low

Change %

Aug 10, 2012

0.7834

0.7865

0.7877

0.7829

-0.39%

Aug 09, 2012

0.7865

0.7897

0.7901

0.7856

-0.41%

Aug 08, 2012

0.7897

0.7933

0.7948

0.7880

-0.45%

Aug 07, 2012

0.7933

0.7948

0.7959

0.7925

-0.19%

Aug 06, 2012

0.7948

0.7939

0.7963

0.7917

0.11%

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of Aug 6-10 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Aug 6

GBP

Halifax HPI m/m

-0.6%

-0.5%

0.8%

EUR

Sentix Investor Confidence

-30.3

-30.8

-29.6

GBP

BRC Retail Sales Monitor y/y

0.1%

1.4%

Aug 7

CHF

Foreign Currency Reserves

406.5B

365.1B

CHF

CPI m/m

-0.5%

-0.5%

-0.3%

EUR

Italian Industrial Production m/m

-1.4%

-1.0%

1.0%

GBP

Manufacturing Production m/m

-2.9%

-4.0%

1.2%

EUR

Italian Prelim GDP q/q

-0.7%

-0.7%

-0.8%

EUR

German Factory Orders m/m

-1.7%

-0.9%

0.7%

GBP

NIESR GDP Estimate

-0.2%

-0.7%

Aug 8

CHF

SECO Consumer Climate

-17

-4

-8

EUR

German 10-y Bond Auction

1.42|1.8

1.31|1.5

EUR

German Industrial Production m/m

-0.9%

-0.8%

1.7%

USD

Prelim Nonfarm Productivity q/q

1.6%

1.5%

-0.9%

USD

Prelim Unit Labor Costs q/q

1.7%

0.5%

1.3%

USD

Crude Oil Inventories

-3.7M

-0.6M

-6.5M

USD

10-y Bond Auction

1.68|2.5

1.46|3.6

Aug 9

GBP

Trade Balance

-10.1B

-8.5B

-8.4B

USD

Trade Balance

-42.9B

-47.4B

-48.0B

USD

Unemployment Claims

361K

371K

367K

USD

Mortgage Delinquencies

7.58%

7.40%

Aug 10

EUR

French Industrial Production m/m

0.0%

0.4%

-2.1%

GBP

PPI Input m/m

1.3%

1.4%

-2.9%

USD

Import Prices m/m

-0.6%

0.1%

-2.4%

USD

Federal Budget Balance

-69.6B

-103.0B

-59.7B

Historical: From 2010 to Present

Highest: 0.9150 EUR on March 01, 2010.

Average: 1.1548 EUR over this period.

Lowest: 0.7758 EUR on July 22, 2012

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Previous

Aug 14

5:30

EUR

French Prelim GDP q/q

0.0%

6:00

EUR

German Prelim GDP q/q

0.5%

9:00

EUR

ZEW Economic Sentiment

-22.3

12:30

USD

Core Retail Sales m/m

-0.4%

12:30

USD

PPI m/m

0.1%

12:30

USD

Retail Sales m/m

-0.5%

14:00

USD

Business Inventories m/m

0.3%

Aug 15

12:30

USD

Core CPI m/m

0.2%

12:30

USD

Empire State Manufacturing Index

7.4

13:15

USD

Industrial Production m/m

0.4%

14:30

USD

Crude Oil Inventories

-3.7M

Aug6

9:00

CHF

ZEW Economic Expectations

-42.5

9:00

EUR

CPI y/y

2.4%

12:30

USD

Building Permits

0.76M

12:30

USD

Unemployment Claims

361K

12:30

USD

Housing Starts

0.76M

14:00

USD

Philly Fed Manufacturing Index

-12.9

Aug 17

6:00

EUR

German PPI m/m

-0.4%

8:00

EUR

Current Account

10.9B

13:55

USD

Prelim UoM Consumer Sentiment

72.3

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