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Friday, June 21, 2013

EUR/USD Fundamental Analysis June 21, 2013 Forecast

Analysis and Recommendations:

The EUR/USD tumbled another 94 points today to trade at 1.32. The slide began yesterday as Mr. Bernankes began his address and news conference after the FOMC meeting. The Fed may moderate its pace of bond purchases later this year and may end them around mid-2014, Bernanke said at a press conference in Washington.If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year, Bernanke said. And if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.Bernanke is expanding the Feds balance sheet toward $4 trillion as he seeks to reduce a jobless rate that stands at 7.6 percent after four years of economic growth. The Fed left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.

Euro-area services and factory output increased more than economists forecast in June, adding to signs the currency bloc may emerge from its record-long recession in the second quarter.A composite index based on a survey of purchasing managers in both industries rose to 48.9 from 47.7 in May, London-based Markit Economics said today. That is the highest in 15 months and exceeded the median estimate of 48.1 in a Bloomberg News survey (ECPMICOU) of 26 economists. A reading below 50 indicates contraction.Positive data helped limit the decline the drop in the euro. The European Central Bank cut its growth projections for the euro zone this month and now predicts the 17-nation economy will shrink 0.6 percent this year before growing 1.1 percent in 2014. Today's data on services and factory output followed a June 18 report showing that European car sales fell to a 20-year low in May after unemployment in the euro area reached a record high of 12.2 percent in April.

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.

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