EUR/USD Weekly Forecast – 15 August

Saturday, Aug 13 2016

Events that marked the week:

Monday's session brought only minor importance German Industrial Production figures. In June 2016, production in industry was up by 0.8% from the previous month on a price, seasonally and working day adjusted basis according to provisional data of the Federal Statistical Office (Destatis). In May 2016, the corrected figure shows a decrease of 0.9% (primary –1.3%) from April 2016. In June 2016, production in industry excluding energy and construction was up by 1.5%. Within industry, the production of capital goods increased by 3.5% and the production of consumer goods by 1.2%. The production of intermediate goods decreased by 0.7%. Energy production was down by 2.7% in June 2016 and the production in construction decreased by 0.5%.

On Tuesday German Trade Balance figures were released. Germany exported goods to the value of 106.8 billion euros and imported goods to the value of 82.0 billion euros in June 2016. Based on provisional data, the Federal Statistical Office (Destatis) also reports that German exports increased by 1.2% and imports by 0.3% in June 2016 year on year. Compared with May 2016, exports increased by a calendar and seasonally adjusted 0.3%, and imports by 1.0%. The foreign trade balance showed a surplus of 24.9 billion euros in June 2016. In June 2015, the surplus amounted to 23.9 billion euros. In calendar and seasonally adjusted terms, the foreign trade balance recorded a surplus of 21.7 billion euros in June 2016.

Friday's session was marked by German and Eurozone GDP data. The German economy continues to grow. In the second quarter of 2016, the gross domestic product (GDP) rose 0.4% on the first quarter of the year after adjustment for price, seasonal and calendar variations. At the beginning of the year 2016, a strong GDP growth of 0.7% had been recorded. The quarter-on-quarter comparison (upon adjustment for price, seasonal and calendar variations) shows that positive contributions came especially from the balance of exports and imports.

Seasonally adjusted GDP rose by 0.3% in the euro area (EA19) and by 0.4% in the EU28 during the second quarter of 2016, compared with the previous quarter, according to a flash estimate published by Eurostat, the statistical office of the European Union. In the first quarter of 2016, GDP grew by 0.6% and 0.5% respectively. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.6% in the euro area and by 1.8% in the EU28 in the second quarter of 2016, after +1.7% and +1.8% respectively in the previous quarter.

This week markets will be looking at:

German ZEW Economic Sentiment/ZEW Economic Sentiment (Tuesday 11:00)

Final CPI (Wednesday 11:00)

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