Daily EUR/USD Fundamental Analysis for February 23, 2012

Daily EUR/USD Fundamental Analysis for February 23, 2012

By FXEmpire.com - Analysis and Recommendations:

The EUR/USD is trading at 1.3248 after hitting a high earlier in the day of 1.3267. The day has been mostly negative for the eurozone, with several below forecast indicators and a downgrade of Greece’s credit rating. The euro still maintained strength to hold in the mid 1.32 level. It is expected to take a fall soon.

Fitch dropped Greece’s credit rating to C from CCC on Wednesday, and warned that a default is ‘highly likely in the near term’.

Eurozone Nov Industrial orders revised to -1.1% from -1.3%, y/y revised to -2.5% from -2.7% A much stronger set of numbers including the revisions.

Eurozone Feb flash composite PMI 49.7 from 50.4 – expected 50.6

German February flash manufacturing PMI 50.1

French February flash manufacturing PMI 50.2

In Italy final January HICP fell -1.8% m/m and rose 3.4% y/y, down from +3.7% y/y in December and the weakest y/y gain since August 2011, ISTAT said. –The main domestic index (NIC) rose 0.3% m/m, +3.2% y/y, down from +3.3% y/y in December and the strongest y/y gain since last summer.

Sales of U.S. existing homes rose 4.3% in January and inventories fell to nearly seven-year lows, as lower prices, unusually warm weather and an improving economy all lifted demand.

The National Association of Realtors said Wednesday that January sales were at a seasonally adjusted annual rate of 4.57 million, compared to economist forecast of 4.7 million. Sales rose in all four major regions, including an 8.8% pop in the West.

Eurozone Nov Industrial orders revised to -1.1% from -1.3%, y/y revised to -2.5% from -2.7% A much stronger set of numbers including the revisions.

Eurozone Feb Flash composite PMI 49.7 from 50.4 – expected 50.6

German February flash manufacturing PMI 50.1

French February flash manufacturing PMI 50.2

Economic Events: (GMT)

09:00 EUR German Ifo Business Climate Index 108.8 108.3

09:00 EUR German Current Assessment 116.5 116.3

09:00 EUR German Business Expectations 102.0 100.9

The German Ifo Business Climate Index rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers. This report includes Current Assessment and Business Expectations. The index is compiled by the Institute for Economic Research.

09:30 GBP BBA Mortgage Approvals 37.3K 36.2K

The British Bankers’ Association (BBA) Mortgage Approvals measures the number of new mortgages approved by BBA-backed banks during the previous month. It includes more than half of the total U.K. mortgage market. It provides information about the buyers in the housing market in the U.K.

11:00 GBP CBI Industrial Trends Orders -13 -16

The Confederation of British Industry (CBI) Industrial Trends Orders measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions. A level above zero indicates order volume is expected to increase; a level below zero indicates expectations are for lower volumes. The reading is compiled from a survey of about 550 manufacturers.

13:30 USD Initial Jobless Claims 354K 348K

13:30 USD Continuing Jobless Claims 3460K 3426K

Initial Jobless Claims and Continuing Jobless Claims measure the number of unemployed individuals who qualify for benefits under unemployment insurance.

A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

Sovereign Bond Auction Schedule

Feb 20-24 n/a UK 0.375% 2062 I/L Gilt syndication

Feb 22 16:30 Italy Details CTZ/BTPei on Feb 24 & BOT on Feb 27

Feb 23 10:10 Sweden Sek 0.75bn I/L bond auction

Feb 23 16:30 Italy Details BTP/CCTeu on Feb 28

Feb 23 18:00 US Auctions 7Y Notes

Feb 24 10:10 Italy Auctions CTZ/BTP

[Originally Posted Here]