Fundamentals of the Day: March 13, 2024

Daily Fundamentals - Quantum Strikes
Daily Fundamentals - Quantum Strikes

Today’s economic calendar for the EUR/USD pair appears light, with no high-impact news directly affecting the Euro or the US Dollar. However, traders should not let their guard down, as significant data releases from the UK could indirectly influence the EUR/USD market dynamics.

GBP Economic Releases and Potential Impact:

  1. GBP Goods Trade Balance Non-EU (Jan):
    • Time: 10:00
    • Previous: -£3.319B
    • Consensus: -£3.1B
    • Analysis: This data indicates the difference in value between imported and exported goods between the UK and non-EU countries. A smaller deficit than expected could signal strength in the UK’s trade relationships outside the EU, potentially strengthening the GBP. While this news is GBP-centric, a stronger GBP often leads to a weaker EUR in EUR/GBP, which can indirectly affect EUR/USD rates.
  2. GBP GDP MoM (Jan):
    • Time: 10:00
    • Previous: -0.1%
    • Consensus: 0.2%
    • Analysis: Monthly GDP figures provide insights into the health of the UK economy. A rebound from the previous month’s contraction could bolster confidence in the UK economy, potentially strengthening the GBP against other currencies, including the EUR. This, in turn, could exert downward pressure on the EUR/USD pair.
  3. GBP Goods Trade Balance (Jan):
    • Time: 10:00
    • Previous: -£13.989B
    • Consensus: -£15B
    • Analysis: This broader measure of the UK’s trade balance includes EU and non-EU trade. A deficit wider than expected could weaken the GBP, which might, in a roundabout way, support the EUR/USD if the EUR strengthens against a weakening GBP.

Trading Strategy for EUR/USD:

Given the absence of direct high-impact news for the EUR/USD, traders should closely monitor the GBP-related releases. Significant deviations from the consensus in the UK data could lead to volatility in the EUR/USD pair, especially through movements in the EUR/GBP cross pair.

Traders might consider adopting a cautious approach today, staying alert to the GBP data releases and their potential ripple effects on the EUR/USD market. It’s also advisable to keep an eye on the broader market sentiment and any other geopolitical developments that could influence currency markets.

Conclusion:

While today might seem quiet for the EUR/USD on the surface, the interconnected nature of global financial markets means that significant data from the UK could still make waves. By staying informed and adaptable, traders can navigate the potential indirect impacts on the EUR/USD pair and seize any arising opportunities.

Trading our dreams into reality,

Mihai Paul Olteanu