The fundamental forex analysis for the euro to dollar currency pair kicked off this morning with the French Preliminary Non Farm Payroll data which came in better than expected at -0.5% against a forecast of -0.7% – naturally not as important as the US Non Farm Payroll but nevertheless an indication that things may be improving in Europe.  This was followed by the more significant CPI, and Core CPI Data for the whole of Europe both of which came in worse than expected at -0.7% and 1.3% respectively, highlighting the tension within the Eurozone with France and Germany now seeming to pull away from the PIGS (Portugal, Italy, Greece and Spain).   Meanwhile the US equivalent is due out later this afternoon where the consensus is for 0.1% for Core CPI and a flat 0% for CPI.  This data set is important as it measures the change in the price of goods and services purchased by consumers but excludes food and energy.  As currency traders because consumer prices have a major impact on inflation (or deflation) they are crucial for any fundamental forex analysis as they can indicate the future direction of a particular currency.  If the US figures come in better than expected then this should be favourable to the US Dollar – however, given its recent performance the forex market may simply ignore this fact and continue selling the greenback.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.