EUR/GBP Fundamental Analysis, March 23, 2015—Forecast

03/23/2015 9:00 am EST

Focus: FOREX

Barry Norman

Director, iOption Academy

In this article, the Barry Norman at FXEmpire.com shares his fundamental analysis for this currency pair, how it was impacted by the Greek debt crisis, and he lays out key upcoming economic events, as well as the dates, times, and countries for the next government bond auctions.

Analysis and Recommendations:

The EUR/GBP gained 31 points to 0.7256 as the euro recovered on hopes of a deal in Greece. The pound remained weak after UK labor data and elections continue to weigh on the currency. At a meeting in Brussels on Thursday, European Union leaders urged Greek Prime Minister Alexis Tsipras to submit a more concrete reform plan so that bailout talks can speed up.

Mr. Tsipras met with German Chancellor Angela Merkel, France’s President Francois Hollande and European Central Bank President Mario Draghi as he sought funds to keep Greece afloat. Greek 10-year bond yields fell on Friday after jumping to their highest level in almost two years Thursday after the ECB granted Greek officials only part of their request for more emergency funding.

UK sterling weakened on Thursday following dovish comments from Bank of England’s chief economist who said the chances of a rate rise or cut are evenly balanced.

The FT reported that Andy Haldane, chief economist at the central bank, said in a speech on Thursday that that while there is not an immediate case for a move in either direction, the chances of a rate rise or a rate cut are broadly evenly balanced.

Haldane also noted that while the risks to inflation are two-sided, it is his personal view that risks are skewed to the downside.

Friday’s Economic Releases Actual vs. Forecast:

  Cur.

Event

Actual

Forecast

Previous

  JPY

Monetary Minutes

 

 

 

  AUD

RBA Governor Stevens

 

 

 

  EUR

German PPI (MoM) (Feb)

0.1%

0.2%

-0.6%

  CAD

Core CPI (MoM) (Feb)

0.6%

0.5%

0.2%

  CAD

Core CPI (YoY) (Feb)

2.1%

2.1%

2.2%

  CAD

Core Retail Sales (MoM)

-1.8%

-0.4%

-2.3%

  CAD

CPI (MoM) (Feb)

0.9%

0.7%

-0.2%

  CAD

Retail Sales (MoM) (Jan)

-1.7%

-0.7%

-1.8%


chart
Click to Enlarge

Upcoming Economic Events That You Should Be Monitoring:

Monday, March 23, 2015

  Cur.

Event

Actual

Forecast

Previous

  GBP

CBI Industrial Trends

 

 

10

  USD

Existing Home Sales

 

4.95M

4.82M

  USD

Existing Home Sales

 

2.5%

-4.9%


Government Bond Auctions

Date       Time   Country

Mar 23   12:00   Norway Details bond auction on 25 Mar

Mar 23   12:00   Belgium Auctions OLOs

Mar 23   11:30   Germany Eur 1.5bn 12M (March 2016) Bubill

Mar 23   17:30   Italy Announces details of CTZ/BTPei on 26 Mar

Mar 24   09:00   Holland Eur 5bn new Jul 2025 DSL auction via DDA

Mar 24   19:00   US Auctions 2-yr Notes

Mar 25   11:03   Sweden Holds bond auction

Mar 25   11:15   Norway Holds bond auction

Mar 25   17:30   Italy Announces details of BTP/CCTeu on 30 Mar

Mar 25   19:00   US Auctions 2-yr FRN, plus 5-yr Notes

Mar 26   11:10   Italy Auctions CTZ/BTPei

Mar 26   19:00   US Auctions 7-yr Notes

By Barry Norman at FXEmpire.com

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