EUR/USD Weekly Forecast - 29 December - 02 January

Events that marked the week:

From Eurozone, on Tuesday, only minor importance French Industrial Production data was released. In November 2014, household expenditure on goods in France increased by 0.4% in volume, after a decrease of 0.8% in October. Analysts were anticipating smaller increase by 0.2%. This rise was mainly due to purchases of textile, clothing and leather (+2.4% after +3.0% in October) and expenditure on energy products (+0.8% after –6.0% in October), purchases of manufactured goods were almost stable (+0.1% after +0.2%).

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GBP/USD Weekly Forecast - 29 December - 02 January

Events that marked the week:

It was eventful European part of the Tuesday's session for Sterling, with Current Account, BBA Mortgage Approval san Final GDP data being released. The United Kingdom’s current account deficit was £27.0 billion in Quarter 3 2014, up from a revised deficit of £24.3 billion in Quarter 2 2014. Analysts were expecting decrease to £21 billion deficit. The deficit in Quarter 3 2014 equated to 6.0% of GDP at current market prices, up from 5.5% in Quarter 2 2014.

GBP/USD Daily Forecast - 29 December

Sterling fell in the course of the session on Tuesday all the way to below 1.55 handle after UK growth was revised down from 3% to 2.6% cent year-on-year in the third quarter. However it managed to rebound and go above 1.5550 handle around which it was for most of the Friday's session. This also points that we could be seeing slower growth in the fourth quarter, which BoE officials have been announcing for some time now. With falling inflation this is just another reason why despite optimistic predications in the middle of the 2014, it is not likely that we are about to witness BoE's rate hike before the second part of 2015.

Euro lower amid Boxing Day trading

Euro is traded lower in a tighter-range Friday's session with some of the European banks being closed in observance of Boxing Day holiday. Euro remains under pressure as Eurozone economy is far from exit gates of recession and with growth rate slowing down even in Germany. Deflation concerns persist, with inflation at only 0.3%, far away from ECB 2% target despite all the monetary measures, which means that we could be seeing another round of additional monetary stimulus quite soon.