EUR/USD Weekly Fundamental Analysis May 5 – 9, 2014 Forecast

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Updated: Aug 23, 2015, 19:00 GMT+00:00

Weekly Analysis and Recommendation: The EUR/USD ended the week at 1.3876 after opening the week at 1.3839. The currency rose steadily this week as

EUR/USD Weekly Fundamental Analysis May 5 – 9, 2014 Forecast

Weekly Analysis and Recommendation:

The EUR/USD ended the week at 1.3876 after opening the week at 1.3839. The currency rose steadily this week as eurozone CPI and unemployment data gave the ECB a chance to duck out on adding additional stimulus. Economics have revised higher our quarterly growth forecasts for the US economy.

After the sharp Q1 disappointment that we dismiss as attributable to temporary factors including weather effects, we’ve revised up our Q2 growth target to 4% from 3.5% on the assumption that a deeper temporary pit will give way to the release of more pent-up demand in Q2. That’s likely across several parts of the US economy including consumer durables, trade following the difficulty in moving product to and from ports, and business investment. We also expect the OECD to flag greater upside to US GDP growth going forward following temporary Q1 weakness when it updates its global economic forecasts next week.

Date	Last	Open	High	Low	Change %
May 02, 2014	1.3876	1.3870	1.3881	1.3812	0.04%
May 01, 2014	1.3870	1.3868	1.3889	1.3863	0.01%
Apr 30, 2014	1.3868	1.3813	1.3877	1.3778	0.40%
Apr 29, 2014	1.3813	1.3852	1.3879	1.3805	-0.28%
Apr 28, 2014	1.3852	1.3839	1.3880	1.3815	0.09%

The consensus of 58 forecasters expects no change in the official ECB policy rate. The odds of embracing QE have also pushed somewhat lower on the heels of the recent CPI print. The question, however, is whether the modest recent rise was enough to allay not only deflation fears but also concerns over operating at low rates of inflation for a prolonged period of time If QE is pursued, and then it may be more likely to be focused upon the asset backed securities market. Ensuring homogeneous outcomes within heterogeneous European debt markets is a challenge for the ECB that operates within highly fragmented markets regardless of what type of asset purchase program may be pursued.

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.

Historical: From 2011 to Present

Highest: 1.4577 USD on Jul 03, 2011

Average: 1.3165 USD over this period.

Lowest: 1.2041 USD on Jul 24, 2012

Major Economic Events for the week of April 28 – May 2 actual v. forecast for Euro, GPB, and USD

Date	Currency	Event	Actual	Forecast	Previous
Apr. 29	EUR	GfK German Consumer Climate	8.5	8.5	8.5
	GBP	GDP (QoQ)	0.8%	0.9%	0.7%
	GBP	GDP (YoY)	3.1%	3.2%	2.7%
	EUR	Italian 10-Year BTP Auction	3.22%		3.29%
	USD	S&P/CS HPI Composite – 20 (YoY)	12.9%	13.0%	13.2%
	USD	CB Consumer Confidence	82.3	83.0	83.9
	EUR	German Retail Sales (MoM)	-0.7%	-0.7%	0.4%
Apr. 30	EUR	French Consumer Spending (MoM)	0.4%	0.3%	-0.1%
	EUR	Spanish GDP (QoQ)	0.4%	0.4%	0.2%
	EUR	Spanish HICP (YoY)	0.3%	0.3%	-0.2%
	EUR	German Unemployment Change	-25K	-10K	-14K
	EUR	CPI (YoY)	0.7%	0.8%	0.5%
	EUR	Core CPI (YoY)	1.0%	1.0%	0.7%
	USD	ADP Nonfarm Employment Change	220K	210K	209K
	USD	Employment Cost Index (QoQ)	0.3%	0.5%	0.5%
	USD	GDP Price Index (QoQ)	1.3%	1.6%	1.6%
	USD	GDP (QoQ)	0.1%	1.2%	2.6%
	USD	Chicago PMI	63.0	56.7	55.9
	USD	Interest Rate Decision	0.25%	0.25%	0.25%
May 01	CNY	Chinese Manufacturing PMI	50.4	50.5	50.3
	GBP	Nationwide HPI (MoM)	1.2%	0.7%	0.5%
	GBP	Nationwide HPI (YoY)	10.9%	10.0%	9.5%
	GBP	Manufacturing PMI	57.3	55.4	55.8
	USD	Core PCE Price Index (MoM)	0.2%	0.2%	0.1%
	USD	Personal Spending (MoM)	0.9%	0.6%	0.5%
	USD	Initial Jobless Claims	344K	319K	330K
	USD	ISM Manufacturing PMI	54.9	54.3	53.7
	USD	ISM Manufacturing Employment	54.7	52.8	51.1
May 02	EUR	Spanish Manufacturing PMI	52.7	53.4	52.8
	EUR	Italian Manufacturing PMI	54.0	52.8	52.4
	EUR	French Manufacturing PMI	51.2	50.9	50.9
	EUR	German Manufacturing PMI	54.1	54.2	54.2
	EUR	Manufacturing PMI	53.4	53.3	53.3
	GBP	Construction PMI	60.8	62.0	62.5
	USD	Nonfarm Payrolls	288K	210K	203K
	USD	Private Nonfarm Payrolls	273K	210K	202K
	USD	Factory Orders (MoM)	1.1%	1.4%	1.5%

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

Date	Currency	Event	Forecast	Previous
May 05	CNY	Chinese HSBC Manufacturing PMI		48.3
	USD	ISM Non-Manufacturing PMI	54.1	53.1
	USD	ISM Non-Manufacturing Employment		53.6
May 06	EUR	Spanish Services PMI	54.4	54.0
	EUR	Italian Services PMI	50.4	49.5
	EUR	French Services PMI	50.3	50.3
	EUR	German Services PMI	55.0	55.0
	EUR	Services PMI	53.1	53.1
	GBP	Services PMI	57.6	57.6
	EUR	Retail Sales (MoM)	-0.2%	0.4%
	USD	Trade Balance	-40.40B	-42.30B
May 07	CNY	Chinese HSBC Services PMI		51.9
	EUR	German Factory Orders (MoM)	0.3%	0.6%
	USD	Nonfarm Productivity (QoQ)	-1.0%	1.8%
	USD	Unit Labor Costs (QoQ)	2.5%	-0.1%
May 08	GBP	RICS House Price Balance	56%	57%
	CNY	Chinese Trade Balance	11.00B	7.71B
	CNY	Chinese Exports (YoY)	-0.9%	-6.6%
	CNY	Chinese Imports (YoY)	0.3%	-11.3%
	EUR	German Industrial Production (MoM)	0.2%	0.4%
	GBP	Interest Rate Decision		0.50%
	GBP	BoE QE Total		375B
	EUR	Interest Rate Decision	0.25%	0.25%
May 09	CNY	Chinese CPI (YoY)	2.1%	2.4%
	CNY	Chinese PPI (YoY)	-1.8%	-2.3%
	CNY	Chinese CPI (MoM)	-0.1%	-0.5%
	EUR	German Trade Balance	16.6B	15.7B
	GBP	Industrial Production (MoM)	-0.2%	0.9%
	GBP	Manufacturing Production (MoM)	0.3%	1.0%
	GBP	Trade Balance	-9.00B	-9.09B