EUR/GBP Weekly Fundamental Analysis, January 14 -18, 2013, Forecast

By:

Updated: Aug 21, 2015, 03:00 GMT+00:00

Introduction: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to

EUR/GBP Weekly Fundamental Analysis, January 14 -18, 2013, Forecast

Introduction: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to wider ranges. The GBP is does not seem to move in response to the EUR as directly currently. The UK austerity program vs. The EU debt crisis seems to have them moving in opposing distances. They are developing new trading personalities and there is a good deal of profit to be made trading this pair. They can be volatile.

The interest rate differential between the European Bank(ECB) and the Bank of England(BoE)
European and UK economic data
Growth differentials between the Euro zone and UK

Weekly Analysis and Recommendations

The EUR/GBP ended the week at 0.8272 climbing from the earlier low of the week of 0.8105 as the euro gained midweek at the ECB and the Bank of England held rates and policy. The Director of the ECB sparked markets on Thursday as Mr. Draghi did a 180 degree about turn giving a very positive address on the outlook for the eurozone. Markets sent the euro sailing but questioned the change in attitude with little changes in the last 30-60 days except the resolution of the Greek bailout.

Date	Last	Open	High	Low	Change %
Jan 11, 2013	0.8272	0.8211	0.8281	0.8205	0.73%
Jan 10, 2013	0.8212	0.8151	0.8215	0.8145	0.75%
Jan 09, 2013	0.8151	0.8146	0.8162	0.8134	0.06%
Jan 08, 2013	0.8146	0.8141	0.8162	0.8137	0.06%
Jan 07, 2013	0.8141	0.8133	0.8149	0.8105	0.10%

In the UK traders became more worried about the economic situation with industrial and manufacturing production tumbling.

Traders can e expect that UK consumer price inflation rose moderately during December, from 2.7% y/y to 2.8% y/y. For RPI expect similar size acceleration up to 3.1% y/y. The key influences this month are likely to be utility bill hikes, lower petrol prices, pre-Christmas clothing discounts and further signs of a reacceleration in food prices. More specifically, all six of the major utility providers announced price hikes of 5-10% towards the end of last year. Four of these should be captured by this month’s CPI — adding a combined 0.25 percentage points to headline inflation. Petrol prices fell by an average of 1.5% m/m during December. Although prices also fell last December, it was by a smaller margin. That should drag just under 0.05 points from the headline print. Clothes prices could provide a surprise in either direction.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of January 7 -11 actual v. forecast for Euro, GBP, the Franc, and USD

Date	Currency	Event	Actual	Forecast	Previous
Jan. 07	GBP	Halifax House Price Index (MoM)	1.3%	0.1%	1.6%
Jan. 08	EUR	Retail Sales (MoM)	0.1%	0.3%	-0.7%
	EUR	German Factory Orders (MoM)	-1.8%	-1.4%	3.8%
Jan. 09	GBP	Trade Balance	-9.2B	-9.1B	-9.5B
	EUR	GDP (QoQ)	-0.1%	-0.1%	-0.1%
	EUR	German Industrial Production (MoM)	0.2%	1.0%	-2.0%
	USD	10-Year Note Auction	1.863%		1.652%
Jan. 10	CNY	Chinese Trade Balance	31.60B	19.70B	19.60B
	EUR	French CPI (MoM)	0.3%	0.4%	-0.2%
	GBP	Interest Rate Decision	0.50%	0.50%	0.50%
	GBP	BOE QE Total	375B	375B	375B
	EUR	Interest Rate Decision	0.75%	0.75%	0.75%
	USD	Initial Jobless Claims	371K	365K	367K
	USD	Continuing Jobless Claims	3109K	3230K	3236K
Jan. 11	CNY	Chinese CPI (YoY)	2.5%	2.3%	2.0%
	CNY	Chinese PPI (YoY)	-1.9%	-1.8%	-2.2%
	CNY	Chinese CPI (MoM)	0.8%	0.5%	0.1%
	CHF	CPI (MoM)	-0.2%	0.1%	-0.3%
	GBP	Industrial Production (MoM)	0.3%	0.8%	-0.9%
	GBP	Manufacturing Production (MoM)	-0.3%	0.5%	-1.3%
	GBP	Industrial Production (YoY)	-2.4%	-1.9%	-3.0%
	USD	Import Price Index (MoM)	-0.1%	0.1%	-0.8%
	USD	Trade Balance	-48.7B	-41.3B	-42.1B
	GBP	NIESR GDP Estimate	-0.3%		0.1%
	USD	Federal Budget Balance	-0.3B	-22.5B	-172.1B

Historical: From 2010 to Present

Highest: 0.9150 EUR on March 01, 2010.

Average: 1.1548 EUR over this period.

Lowest: 0.7758 EUR on July 22, 2012

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date	Time	Currency	Event	Forecast	Previous
Jan. 14	10:00	EUR	Industrial Production (MoM)	0.1%	-1.4%
Jan. 15	00:01	GBP	RICS House Price Balance	-8%	-9%
	07:00	EUR	German CPI (MoM)	0.9%	0.9%
	07:00	EUR	German CPI (YoY)	2.1%	2.1%
	09:30	GBP	CPI (YoY)	2.7%	2.7%
	09:30	GBP	PPI Input (MoM)	-0.1%	0.1%
	09:30	GBP	CPI (MoM)	0.5%	0.2%
	09:30	GBP	PPI Input (YoY)	0.3%	-0.3%
	13:30	USD	Core PPI (MoM)	0.2%	0.1%
	13:30	USD	Core Retail Sales (MoM)	0.2%
	13:30	USD	PPI (MoM)	-0.1%	-0.8%
	13:30	USD	Retail Sales (MoM)	0.2%	0.3%
	13:30	USD	NY Empire State Manufacturing Index	2.0	-8.1
	13:30	USD	PPI (YoY)	1.4%	1.5%
	13:30	USD	Core PPI (YoY)	2.1%	2.2%
Jan. 16	08:15	CHF	Retail Sales (YoY)	3.2%	2.7%
	10:00	EUR	CPI (YoY)	2.2%	2.2%
	10:00	EUR	Core CPI (YoY)		1.4%
	13:30	USD	Core CPI (MoM)	0.2%	0.1%
	13:30	USD	CPI (MoM)		-0.3%
	13:30	USD	CPI (YoY)	1.8%	1.8%
	13:30	USD	Core CPI (YoY)	1.9%	1.9%
	14:00	USD	TIC Net Long-Term Transactions		1.3B
	14:15	USD	Industrial Production (MoM)	0.3%	1.1%
Jan. 17	08:15	CHF	PPI (MoM)
Jan. 18	02:00	CNY	Chinese Fixed Asset Investment (YoY)	20.7%	20.7%
	02:00	CNY	Chinese GDP (YoY)	7.8%	7.4%
	02:00	CNY	Chinese Industrial Production (YoY)	10.1%	10.1%
	02:00	CNY	Chinese Retail Sales (YoY)	14.9%	14.9%
	09:30	GBP	Retail Sales (MoM)	0.2%
	09:30	GBP	Retail Sales (YoY)	1.1%	0.9%