EUR/USD Fundamental Analysis March 19, 2012, Forecast

Analysis and Recommendations:

The EUR/USD is holding at 1.3174 up almost 1 cent, from the opening at 1.3080.

The greenback traded lower after a report on inflation was seen as giving policy makers more reason to maintain ultra-accommodative monetary measures. Also investors feeling more confident spread out to more risky assets.

With U.S. economic data improving and inflationary pressures starting to rise, [the Fed] may not be able to maintain its ultra-accommodative monetary policy for much longer. Today’s U.S. CPI data could prove to be the main catalyst for trade if it rises above the key 3% level on a year-over-year basis.

U.S. consumer prices increased 0.4% in February, owing mainly to the surging cost of gas, the Labor Department said Friday. The government also reported that inflation-adjusted hourly wages, on average, fell 0.3% in February as higher prices outstripped a 0.1% gain in earnings.

The output of the nation’s factories, mines and utilities was flat in February, the Federal Reserve said Friday. This was well below Wall Street expectations of a 0.4% gain. 

Consumer sentiment in March declines for the first time since August, as rising gasoline prices cause a downturn in expectations, according to a key gauge released on Friday.


Released Economic Reports for March 16, 2012 actual v. forecast







Italian Trade Balance 













Trade Balance 













Core CPI (MoM) 














CPI (MoM) 














Foreign Securities Purchases 














Manufacturing Sales (MoM) 









Economic Events for March 19, 2012

01:01     GBP      Rightmove House Price Index (MoM)    

The Rightmove House Price Index (HPI) measures the change in the asking price of homes for sale. This is the U.K.’s earliest report on house price inflation, but tends to have a mild impact because asking prices do not always reflect selling prices.                                                                                

01:01     GBP      Nationwide Consumer Confidence        

Nationwide Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.                                                                                     

13:30     CAD       Wholesale Sales (MoM)

Wholesale Sales measures the change in the total value of sales at the wholesale level. It is a leading indicator of consumer spending.


Government Bond Auctions (this week)   

Mar 19  n/a   Greece  CDS Auction

Mar 19  10:10  Slovakia  Bond auction

Mar 19  10:10  Norway  T-bill auction

Mar 20  09:30  Spain  12 & 18M T-bill auction

Mar 21  10:10  Sweden  Nominal bond auction

Mar 21  10:30  Germany  Eur 5.0bn Mar 2014 Schatz

Mar 21  10:30  Portugal  Eur 0.75-1.0bn 4 & 6M T-bills

Mar 22  10:10  Sweden  I/L bond auction

Mar 22  10.30  UK  Auctions 0.625% 2042 I/L Gilt

Mar 22  15:00  US

Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar

28 & 7Y Notes on Mar 29

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