EUR/GBP Fundamental Analysis May 25, 2012, Forecast

Analysis and Recommendations:

The EUR/GBP  remained close to the opening, trading at 0.8014 after opening at 0.8018 and reaching a high of 0.8026.  The drama in the Eurozone continues to weigh on markets, with today’s press reports featuring prominent former ECB board member Lorenzo Binhi Smaghi discussing a “war game”- style simulation of a Greek withdrawal from the common currency. Binhi Smaghi said that “leaving is difficult” and concluded from the simulation/exercise that leaving the euro “is not the answer to their (Greece’s) problems.” We agree, however markets were not heartened as his mere comment provided a further sign that serious people are contemplating at least the possibility of a Greek exit from the Eurozone.  

The negative eco data and the disappointing GDP and the revision of the previous GDP weakened the sterling, which offset the poor euro PMI numbers. Germany had a day of negative eco data. But the euro was able to move upwards against sterling today, as the weakness exhibited since the IMF warned on the outlook for the UK economy, the pound has not been able to recover. UK GDP was revised lower by one tenth of a percentage point to -0.3% q/q (the initial reading was -0.2% q/q). The revision was principally attributable to weaker construction data than was originally registered in the Q1 report  

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 up to the data analysis and information in our weekly reports.

Economic Data for May 24, 2012 actual v. forecast

Date

Time

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

May 24

03:30

 

CNY

 

 

 

Chinese HSBC Mfg PMI 

48.70

 

 

 

49.30 

 

 

 

07:00

 

EUR

 

 

 

German GDP (QoQ) 

0.5%

 

0.5% 

 

0.5% 

 

 

 

07:00

 

EUR

 

 

 

German GDP (YoY) 

1.7%

 

1.7% 

 

1.7% 

 

 

 

07:58

 

EUR

 

 

 

French Manufacturing PMI 

44.4

 

47.0 

 

46.9 

 

 

 

08:28

 

EUR

 

 

 

German Manufacturing PMI 

45.0

 

47.0 

 

46.2 

 

 

 

09:00

 

EUR

 

 

 

German Ifo Business Climate

106.9

 

109.4 

 

109.9 

 

 

 

09:00

 

EUR

 

 

 

Manufacturing PMI 

45.0

 

46.1 

 

45.9 

 

 

 

09:00

 

EUR

 

 

 

German Current Assessment 

113.3

 

117.4 

 

117.5 

 

 

 

09:00

 

EUR

 

 

 

German Business Expectations 

100.9

 

102.0 

 

102.7 

 

 

 

09:30

 

GBP

 

 

 

BBA Mortgage Approvals 

32.4K

 

32.3K 

 

31.9K 

 

 

 

09:30

 

GBP

 

 

 

Business Investment (QoQ) 

3.6%

 

3.2% 

 

-3.3% 

 

 

 

09:30

 

GBP

 

 

 

GDP (QoQ) 

-0.3%

 

-0.2% 

 

-0.2% 

 

 

 

09:30

 

GBP

 

 

 

GDP (YoY) 

-0.1%

 

0.0% 

 

0.0% 

 

 

 

13:30

 

USD

 

 

 

Core Durable Goods Orders

-0.6%

 

0.9% 

 

-0.8% 

   

 

13:30

 

USD

 

 

 

Durable Goods Orders (MoM) 

0.2%

 

0.5% 

 

-3.7% 

   

 

13:30

 

USD

 

 

 

Initial Jobless Claims 

370K

 

370K 

 

372K 

   

 

13:30

 

USD

 

 

 

Continuing Jobless Claims 

3260K

 

3250K 

 

3289K 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

May 25

6:00

EUR

 

GfK German Consumer Climate

   

5.6

7:15

CHF

 

Employment Level

   

4.04M

TBD

ALL

 

G8 Meetings

     

13:55

USD

 

Revised UoM Consumer Sentiment

     

 

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