By FXEmpire.com
Analysis and Recommendations:
The EUR/USD is trading at 1.2272 as the euro continues to weakened dipping .0012
EUR remains unchanged vs the USD as it weakens on the crosses. While EUR is up 0.9% over the past five sessions, factors weighing on the common currency include this morning’s weaker Spanish debt auctions (2 & 5 year), where lower demand drove yields higher relative to prior sales of debt. The five year auction had an average yield of 6.46% (vs 6.07% at the previous auction); Spain’s 10 year yield is back over 7.0%. Meanwhile, political developments in Germany are complicating Euro-area wide efforts to promote the European Redemption Fund (ERF), as Chancellor Merkel seeks to maintain recent gains in approval ratings ahead of next year’s elections.
Risk appetite is strong, with commodities, equity futures, and higher-beta FX majors all showing strength ahead of the North American session. AUD & NZD are outperforming, followed by mild strength for JPY, CAD, and GBP, while EUR is flat. Factors supporting the shift in risk appetite include constructive headlines regarding the EFSF and a continued decline in volatility (see bottom chart for FX majors’ vol), improving the risk-adjusted return of higher yielding currencies such as AUD, NZD, and even to a certain extent, CAD. Meanwhile, yesterday’s release of the Fed’s Beige Book detailed anecdotal evidence of a US economy that is expanding at a ‘modest to moderate’ pace, supported by a slow expansion in manufacturing along with ‘tepid’ employment growth.
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
Economic Data July 19, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul. 19 |
AUD |
NAB Quarterly Business Confidence |
-2.00 |
-1.00 |
|
|
GBP |
Retail Sales (MoM) |
0.1% |
0.6% |
1.5% |
|
|
GBP |
Retail Sales (YoY) |
1.6% |
2.4% |
2.1% |
|
|
USD |
Initial Jobless Claims |
386K |
365K |
352K |
|
|
CAD |
Wholesale Sales (MoM) |
0.9% |
0.2% |
1.2% |
|
|
USD |
Continuing Jobless Claims |
3314K |
3299K |
3313K |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jul 20 |
6:00 |
EUR |
-0.3% |
|
|
8:30 |
GBP |
15.6B |
Government Bond Auctions
Date Time Country
Jul 23- n/a UK
Jul 23 09:30 Germany
Jul 24 08:30 Netherlands
Jul 24 08:30 Spain
Jul 24 15:30 Italy
Jul 24 17:00 US
Jul 25 09:30 Germany
Jul 25 15:30 Italy
Jul 25 17:00 US
Jul 26 00:30 Japan
Jul 26 09:10 Italy
Jul 27 09:10 Italy
Jul 27 17:00 US
Click here to read EUR/USD Technical Analysis.
Originally posted here
