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 0.8079
The Pound declined against the Euro most of the week, while the UK currency slumped to new lows, as global risk appetite weakened on the threat of contagion in the Euro-zone. The single currency fell to a new four month low against the U.S Dollar, as Spain’s borrowing costs rose at the latest bond auction, which increased concerns that the Greek debt crisis is spreading to other Euro-zone economies.
There was increased concern surrounding the UK economy, especially given the threats to the European outlook. Risk conditions will remain an important focus and an increase in fear pushed the Pound lower against the Dollar again over-night.
Major Economic Events for the week of May 14-18 actual v. forecast for Euro, GPB, and the Franc
|
CHF |
PPI (MoM) |
-0.1% |
0.3% |
0.3% |
|
EUR |
Industrial Production (MoM) |
-0.3% |
0.4% |
0.8% |
|
GBP |
Trade Balance |
-8.6B |
-8.4B |
-8.6B |
|
EUR |
GDP (QoQ) |
0.0% |
-0.2% |
-0.3% |
|
EUR |
ZEW Economic Sentiment |
-2.4 |
11.7 |
13.1 |
|
GBP |
Claimant Count Change |
-13.7K |
5.0K |
-5.4K |
|
GBP |
Average Earnings Index +Bonus |
0.6% |
1.0% |
1.1% |
|
EUR |
Core CPI (YoY) |
1.6% |
1.5% |
1.6% |
|
EUR |
CPI (YoY) |
2.6% |
2.6% |
2.6% |
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, GBP, CHF and the USD
|
May 21 |
5:45 |
CHF |
SECO Consumer Climate |
-18 |
-19 |
|
May 22 |
8:30 |
GBP |
CPI y/y |
3.5% |
|
|
8:30 |
GBP |
Public Sector Net Borrowing |
15.9B |
||
|
8:30 |
GBP |
RPI y/y |
3.6% |
||
|
TBD |
GBP |
BOE Inflation Letter |
|||
|
14:00 |
USD |
Existing Home Sales |
4.48M |
||
|
May 23 |
8:00 |
EUR |
Current Account |
-1.3B |
|
|
8:30 |
GBP |
MPC Meeting Minutes |
0-0-9 |
||
|
TBD |
EUR |
Industrial New Orders m/m |
-1.2% |
||
|
10:00 |
GBP |
CBI Industrial Order Expectations |
-8 |
||
|
TBD |
GBP |
Inflation Report Hearings |
|||
|
14:00 |
USD |
New Home Sales |
328K |
||
|
14:30 |
USD |
Crude Oil Inventories |
|||
|
May 24 |
6:00 |
CHF |
Trade Balance |
1.69B |
|
|
7:00 |
EUR |
French Flash Manufacturing PMI |
46.9 |
||
|
7:00 |
EUR |
French Flash Services PMI |
45.2 |
||
|
7:30 |
EUR |
German Flash Manufacturing PMI |
46.2 |
||
|
7:30 |
EUR |
German Flash Services PMI |
52.2 |
||
|
8:00 |
EUR |
German Ifo Business Climate |
109.9 |
||
|
8:00 |
EUR |
Flash Manufacturing PMI |
45.9 |
||
|
8:00 |
EUR |
Flash Services PMI |
46.9 |
||
|
8:30 |
GBP |
Retail Sales m/m |
1.8% |
||
|
8:30 |
GBP |
Revised GDP q/q |
-0.2% |
||
|
8:30 |
GBP |
BBA Mortgage Approvals |
31.9K |
||
|
8:30 |
GBP |
Prelim Business Investment q/q |
-3.3% |
||
|
12:30 |
USD |
Unemployment Claims |
|||
|
12:30 |
USD |
Durable Goods Orders m/m |
-4.0% |
||
|
13:00 |
EUR |
Belgium NBB Business Climate |
-10.7 |
Originally posted here
