EUR/GBP Analysis Forecast For 21 May 2015

Analysis and Recommendations (EUR/GBP Forecast):

The EUR/GBP declined 26 points as the euro fell farther than the pound as weak inflation data and German economic sentiment. The pair is trading at 0.7202. ECB’s Coeure provided fresh impetus for a sharp move lower in euro, with dovish comments leaked right on the European open, stating that due to seasonal factors QE will be front loaded to May and June, hypothetically deposit rates could be even more negative. The euro fell 150 points in an hour and helped the Bund retrace further some of the severe losses suffered in recent weeks. Equities, of course, reacted positively to the news, with the DAX climbing over 100 points and the S&P making new highs as well.

The pound also fell against the euro after the data, which added to expectations the Bank of England will hold off long into next year with a rise in interest rates.

The Bank of England released its May Inflation Report last week. During the Q&A period, a reporter lobbed Governor Mark Carney an easy pitch to hit home the point that the British pound has become excessively strong. Carney did not take the bait. The British economy has entered into negative inflation for the first time since 1960, according to today’s figures from the ONS.

UK’s annual rate of consumer price inflation (CPI)  fell to -0.1% down from 0% previously.  It is the first time that the CPI figures have been in negative territory since official records for the CPI index began in 1996.

However, according to the ONS, comparable estimates going back further indicate that is the first time consumer prices have showed deflation since 1960.

ForexTraq provides in-depth analysis for each currency and commodity we review in forex trading. 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 for EUR/GBP in our weekly reports.

Today’s economic releases actual vs. forecast:

Cur. Event Actual Forecast Previous
  NZD PPI Input (QoQ) (Q1) -1.1% -0.7% -0.4%  
  AUD Monetary Policy Meeting        
  NZD Inflation Expectations (QoQ) 1.9%   1.8%  
  GBP CPI (MoM) (Apr) 0.2% 0.4% 0.2%  
  GBP CPI (YoY) (Apr) -0.1% 0.0% 0.0%  
  GBP PPI Input (MoM) (Apr) 0.4% 0.8% 0.4%
  EUR German ZEW Current Conditions 65.7 68.0 70.2  
  EUR German ZEW Economic 41.9 49.0 53.3  
  EUR Core CPI (YoY) (Apr) 0.6% 0.6% 0.6%  
  EUR CPI (YoY) (Apr) 0.0% 0.0% 0.0%  
  EUR CPI (MoM) (Apr) 0.2% 0.2% 1.1%  
  EUR Trade Balance (Mar) 23.4B 22.8B 20.3B  
  EUR ZEW Economic Sentiment 61.2 62.4 64.8

 EURGBP chart

Upcoming Economic Events that you should be monitoring for EUR/GBP in forex trading:

Wednesday, May 20, 2015

Cur. Event Actual Forecast Previous
  JPY GDP (QoQ) (Q1)   0.4% 0.4%  
  JPY GDP (YoY) (Q1)   1.5% 1.5%  
  AUD Westpac Consumer Sentiment     -3.2%  
  EUR German PPI (MoM) (Apr)   0.2% 0.1%  
  GBP BoE MPC Meeting Minutes        
  CAD Wholesale Sales (MoM) (Mar)   0.7% -0.4%  
  USD Crude Oil Inventories     -2.191M  
  USD FOMC Meeting Minutes      

Government Bond Auctions

Date Time Country

May 20 09:03 Sweden Holds bond auction

May 21 08:30 Spain Auctions Bonos

May 21 09:03 Sweden Holds bond exchange auction

May 21 09:10 France Auctions BTANs

May 21 09:30 UK Auctions 4.75% 2030 Conventional Gilt

May 21 10:10 France Auctions

May 21 15:30 Italy Announces details of CTZ/BTPei on 26 May

May 21 15:00 US Announces details of 2-year FRN on 27 May, plus 2/5/7 year

May 21 17:00 US Auctions 10-year TIPs

May 22 09:03 Sweden Holds bond exchange auction

May 22 10:00 Norway Details bond auction on 27 May


EUR/GBP analysis forecast


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