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 ended the week at 0.8038. End of the week found the BoE policy decision was the key factor for EUR/GBP trading. The BoE didn’t restart the printing press. This keeps sterling in the drivers’ seat against the euro, which is still suffering from political and economic uncertainty in the region. EUR/GBP came close to the 0.8000 barrier, but a clear break didn’t occur.
EUR/GBP changed hands in the 0.8025 area at the start of trading in Europe. Sentiment on the European markets was a bit less negative compared to the tensions that spooked investors on Wednesday. The sell-off of European equities slowed and the euro entered calmer waters, too. On the UK side of the story, some investors adjusted sterling long positions ahead of the BoE policy decisions. EUR/GBP filled offers in the 0.8045 area late in the morning. However, the BoE didn’t backtrack on its hint in the minutes of the April meeting. It left the amount of asset purchases unchanged. The market reaction to the announcement was very moderate. UK bond yields rose a few basis points and EUR/GBP came near the 0.8000 mark. However, a clear break didn’t occur. So, a lot of sterling positive news was apparently already discounted.
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, which cover the current week and are published by Sunday before the new week begins.
Major Economic Events for the past week actual v. forecast
|
May 10 |
AUD |
Employment Change |
15.5K |
-5.5K |
44.0K |
|
AUD |
Unemployment Rate |
4.9% |
5.3% |
5.2% |
|
|
GBP |
Interest Rate Decision |
0.50% |
0.50% |
0.50% |
|
|
Trade Balance |
0.4B |
1.0B |
0.3B |
||
|
USD |
Trade Balance |
-51.8B |
-50.0B |
-45.4B |
|
|
USD |
Initial Jobless Claims |
367K |
369K |
368K |
|
|
USD |
Fed Chairman Bernanke Speaks |
||||
|
May 11 |
CNY |
Chinese CPI (YoY) |
3.4% |
3.3% |
3.6% |
|
CNY |
Chinese CPI (MoM) |
-0.1% |
-0.2% |
0.2% |
Historical:
Highest: 1.2336 EUR on 29 Jun 2010.
Average: 1.1548 EUR over this period.
Lowest: 1.0686 EUR on 13 Oct 2009
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
May 14 |
07:00 |
EUR |
Finnish CPI (YoY) |
2.90% |
|
08:15 |
CHF |
PPI (MoM) |
0.3% |
|
|
08:30 |
EUR |
Dutch Retail Sales (YoY) |
0.90% |
|
|
10:00 |
EUR |
Industrial Production (MoM) |
-0.2% |
0.5% |
|
May 15 |
06:30 |
EUR |
French CPI (MoM) |
0.8% |
|
07:45 |
EUR |
French Non-Farm Payrolls (QoQ) |
-0.1% |
|
|
09:30 |
GBP |
Trade Balance |
-8.8B |
|
|
May 16 |
09:30 |
GBP |
Average Earnings Index +Bonus |
1.1% |
|
09:30 |
GBP |
Claimant Count Change |
3.6K |
|
|
10:00 |
EUR |
CPI (YoY) |
2.6% |
2.6% |
|
10:00 |
EUR |
Core CPI (YoY) |
1.6% |
|
|
11:00 |
EUR |
Portuguese Unemployment Rate |
14.00% |
Upcoming Government Bond Auctions
Date Time Country
May 14 08:30 Spain
May 14 09:10 Italy
May 14 09:10 Slovakia
May 14 09:10 Norway
May 14 09:30 Germany
May 14 10:00 Norway
May 15 09:30 Belgium
May 15 09:30 UK
May 16 08:50 France
May 16 09:10 Sweden
Originally posted here
