By FXEmpire.com
Analysis and Recommendations:
The EUR/USD picked up a bit of steam today trading 1.2743. Positive data in the US gave investors a bit of confidence to move to a bit more risky assets. Selling off the USD to move elsewhere. The dollar remains strong.
Market sentiment remains European negative, risk aversion position.
Risk assets have sold off in the Asian and European sessions, with weakness seen commodities, high-beta currencies, and equity futures. The risk off tone to market movement is the result of developments in Greece, as the country will be holding another election in mid-June following the collapse of talks to form a government.
Meanwhile in the US, political turmoil has begun to ratchet upward following yesterday’s comments from Republican House Speaker John Boehner that set the stage for a repeat of last year’s confrontation over fiscal issues. In this environment, all majors are weaker vs the USD, with JPY underperforming, followed by NZD, GBP, CAD, AUD and EUR.
In the US, data released was overall positive and provided additional strength to the USD. Building permits were under forecast, but housing starts soared above forecast. Markets reacted positively to the US data today.
Yesterday’s speech from voting FOMC member Duke provided a constructive update of her outlook for housing in the US. Noted improvements in housing include a slowing in the pace of house declines, a slowing in the pace of delinquencies, and supportive price signals in the rental market that are spurring private investment in the sector. However, the slow pace of household formation and the tight credit environment are persistent headwinds that are stifling a more robust recovery. The FOMC minutes will be released late in the afternoon and may not have any effects on the markets today unless they contain a surprise, traders will most likely read, digest and interpret the minutes as we might see some reaction in overnight trading.
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 May 16, 2012 actual v. forecast
|
JPY |
Tertiary Industry Activity Index |
-0.6% |
-0.3% |
0.0% |
|
AUD |
Westpac Consumer Sentiment |
0.80% |
-1.60% |
|
|
AUD |
Wage Price Index (QoQ) |
0.9% |
0.8% |
1.0% |
|
GBP |
Average Earnings Index +Bonus |
0.6% |
1.0% |
1.1% |
|
GBP |
Claimant Count Change |
-13.7K |
5.0K |
-5.4K |
|
EUR |
CPI (YoY) |
2.6% |
2.6% |
2.6% |
|
EUR |
Core CPI (YoY) |
1.6% |
1.5% |
1.6% |
|
USD |
Building Permits |
0.715M |
0.730M |
0.769M |
|
USD |
Housing Starts |
0.717M |
0.680M |
0.699M |
|
CAD |
Manufacturing Sales (MoM) |
1.90% |
1.00% |
-0.20% |
|
USD |
Industrial Production |
1.1% |
0.6% |
-0.6% |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
May 17 |
13:30 |
USD |
365K |
367K |
|
|
13:30 |
USD |
3235K |
3229K |
||
|
15:00 |
USD |
10.0 |
8.5 |
Click here a current EUR/USD Chart.
Originally posted here
