Analysis and Recommendations (EUR/GBP Forecast for 19 May):
The EUR/GBP dipped 14 points to 0.7266 as the euro pared early gains Monday, after enjoying a strong run last week largely as the dollar weakened on lackluster U.S. economic data. In early trade, the single currency was around 0.3% higher against the dollar at just over $1.14, but it sold off as trading got under way and was recently flat against the buck.
No major data releases are scheduled for Monday, and later in the week investors are once again expected to cast their attention to Greece. The country made last week’s payment to the International Monetary Fund, but investors wonder how long it will continue to be able to service its debt.
“The next two weeks in Greece are going to be crucial,” Barclay’s economists wrote in a note. Jim Reid, the head of global fundamental credit strategy at Deutsche Bank said that for Greece “an endgame appears to be creeping closer now.”
Sterling hit a 7-year high against a trade-weighted basket of currencies on Wednesday on strong wages and jobs data, but was knocked back after the BoE cut its growth forecasts and warned about a strong pound’s impact on the outlook for interest rates.
Commerzbank said in a note that the downgrades to productivity forecasts indicate the BoE will not be comfortable with the currency’s appreciation over the longer term.
“Indeed, if the forecasts manifest then further sterling appreciation would not be justified at all. We remain of the view that euro/sterling will trade at lower levels over the medium term more so as a function of euro weakness,’’ they said.
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:
|AUD||RBA Assist Gov Lowe Speaks|
|JPY||Industrial Production (MoM)||-0.8%||-0.3%||-0.3%|
|JPY||Tertiary Industry Activity Index||-1.0%||-0.5%||0.4%|
|CHF||Retail Sales (YoY) (Mar)||-2.8%||-2.0%||-3.1%|
Upcoming Economic Events that you should be monitoring for EUR/GBP in forex trading:
Tuesday, May 19, 2015
|AUD||Monetary Policy Minutes|
|GBP||CPI (YoY) (Apr)|
|EUR||German ZEW Economic||49.0||53.3|
|EUR||CPI (YoY) (Apr)||0.0%||0.0%|
|USD||Building Permits (Apr)||1.065M||1.042M|
|CAD||BoC Gov Poloz Speaks|
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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