By FXEmpire.com
Analysis and Recommendations:
The EUR/USD is trading post release at 1.2263 immediately reversing course.
Traders are more or less sitting on the side at this time, waiting for the big event of the day, the FOMC statement due at 2:15 US time from Fed Chairman Bernanke. Regardless of expectation and actions, the markets will react to the statement. We have decided to hold off our daily Fundamental Analysis until after the statement, so that we can add in our expectations and market reactions to Mr. Bernanke’s decisions. Below you will find our daily analysis prior to the release. Followed by an update noted as post release, we will also try to give you up to date pricing as the markets react.
EUR is flat relative to the USD, as weak PMIs across the Eurozone are offset by relative central bank policy, with uncertainty over the course of Fed action at today’s meeting, as well as concerns over President Draghi’s ability to provide accommodation at tomorrow’s ECB meeting given that his remarks from last week generated a considerable amount of acrimony between himself and his peers on the ECB’s governing council. The German Bundesbanks President Weidmann has made clear his aversion to bond purchases and wants the ECB to conduct policy within its mandate. His comments in an interview published on the Bundesbanks website, uses forceful language to underscore the sway that his institution holds in the policymaking process. Weidman’s tone therefore poses considerable risk to hopes for ECB easing tomorrow. The Eurozone’s PMIs continue to fall to post-2009 lows, as Germany (43.0), France (43.4), and the Eurozone aggregate (44.0) came in below their flash estimates from July 24th.
At this time the pair is trading at 1.2314 as investors are positioning themselves for the FOMC release later today.
Chairman Bernanke and associates today downgraded their view on the economy but otherwise didn’t make any changes to its key interest rate, low-rate pledge, or asset-buying plans. The FOMC now says “economic activity decelerated somewhat over the first half of the year,” vs. a prior description of saying the “economy has been expanding moderately.” The decision not to extend its low-rate pledge beyond the current “late 2014? was unexpected. The Fed kept its federal funds rate target between 0% and 0.25% and said it “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.” This was the bare minimum that the markets were expecting, leaving open anticipation for stimulus in September. Overall markets were disappointed.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthlyanalysis 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
Economic Data August 1, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Aug. 01 |
KRW |
South Korean CPI (YoY) |
1.5% |
2.0% |
2.2% |
|
KRW |
South Korean CPI (MoM) |
-0.2% |
0.3% |
-0.1% |
|
|
CNY |
Chinese Manufacturing PMI |
50.10 |
50.30 |
50.20 |
|
|
AUD |
House Price Index (QoQ) |
0.50% |
-0.50% |
-0.10% |
|
|
CNY |
Chinese HSBC Manufacturing PMI |
49.50 |
49.50 |
||
|
GBP |
Nationwide HPI (MoM) |
-0.7% |
-0.1% |
-0.6% |
|
|
EUR |
Italian Manufacturing PMI |
44.30 |
44.20 |
44.60 |
|
|
EUR |
French Manufacturing PMI |
43.4 |
43.6 |
43.6 |
|
|
EUR |
German Manufacturing PMI |
43.0 |
43.3 |
43.3 |
|
|
EUR |
Manufacturing PMI |
44.0 |
44.1 |
44.1 |
|
|
GBP |
Manufacturing PMI |
45.4 |
48.7 |
48.4 |
|
|
USD |
ADP Nonfarm Employment Change |
163K |
120K |
176K |
Upcoming Economic Events that affect the CHF, EUR and GBP
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Aug 2 |
7:00 |
EUR |
Spanish Unemployment Change |
-98.9K |
|
|
7:15 |
CHF |
Retail Sales y/y |
6.2% |
||
|
7:30 |
CHF |
SVME PMI |
48.1 |
||
|
8:30 |
GBP |
Construction PMI |
48.2 |
||
|
11:00 |
GBP |
Asset Purchase Facility |
375B |
||
|
11:00 |
GBP |
Official Bank Rate |
0.50% |
0.50% |
|
|
11:45 |
EUR |
Minimum Bid Rate |
0.75% |
0.75% |
|
|
12:30 |
EUR |
ECB Press Conference |
|||
|
Aug 3 |
8:30 |
GBP |
Services PMI |
51.3 |
|
|
9:00 |
EUR |
Retail Sales m/m |
0.6% |
Government Bond Auctions
Date Time Country
Aug 02 08:30 Spain
Aug 06 09:10 Norway
Aug 07 00:30 Japan
Aug 07 09:15 Austria
Aug 07 14:30 UK
Aug 07 17:00 US
Aug 08 09:30 Germany
Aug 08 10:00 Norway
Aug 08 15:30 Italy
Aug 08 17:00 US
Aug 09 15:30 Italy
Aug 09 17:00 US
Aug 10 10:00 Belgium
Click here to read EUR/USD Technical Analysis.
Originally posted here
