By FXEmpire.com
Introduction: While the ranges are wider (and so should stops be), the lines are rather distinctive, especially towards the borders of the long term wide range. This pair makes for good trades, with the new austerity program implemented in the UK, the GBP is moving more on Fundamentals now.
- The interest rate differential between the Bank of England(BoE) and the Federal Reserve
- High yield and attractive growth in the UK drives GBP/USD higher
Weekly Analysis and Recommendation:
The GBP/USD ended the week at1.5667 as it is underperforming its peers ending a week in which it has declined 1.0% vs the USD. Recent data, which included moderate CPI, weak retail sales, and deteriorating GDP figures, suggest a more challenging environment for the UK, and have raised the possibility of additional easing from the BoE. Yesterday, the BoE’s David Miles (the only MPC member to have recently voted for additional asset purchases) commented that QE remains an effective tool for policymakers. With the revision of the GDP downwards, markets reacted negatively, when the GDP was announced several weeks ago and the UK went into a technical recession, markets had little reaction.
This week with the global worries and the drop in growth and the negative statements from the IMF and the OECD, markets moved away from the sterling.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Major Economic Events for the week of May 21-25 actual v. forecast for Euro, GPB, and the Franc
|
Currency |
Actual |
Forecast |
Previous |
|
|
GBP |
CPI y/y |
3.0% |
3.1% |
3.5% |
|
GBP |
Public Sector Net Borrowing |
-18.8B |
-8.5B |
14.6B |
|
GBP |
MPC Meeting Minutes |
0-0-9 |
0-0-9 |
0-0-9 |
|
GBP |
Retail Sales m/m |
-2.3% |
-0.8% |
2.0% |
|
EUR |
German Flash Manufacturing PMI |
45.0 |
47.1 |
46.2 |
|
EUR |
German Ifo Business Climate |
106.9 |
109.4 |
109.9 |
|
GBP |
Revised GDP q/q |
-0.3% |
-0.2% |
-0.2% |
Historical:
Highest: 1.681 USD on 17 Nov 2009.
Average: 1.5807 USD over this period
Lowest: 1.3506 USD on 23 Jan 2009.
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
Date |
Time |
Currency |
Previous |
|
|
May 28 |
28th-31st |
GBP |
-0.2% |
|
|
May 29 |
All Day |
EUR |
0.2% |
|
|
14:00 |
USD |
69.2 |
||
|
May 30 |
7:00 |
CHF |
0.40 |
|
|
8:00 |
EUR |
3.2% |
||
|
8:30 |
GBP |
1.4B |
||
|
14:00 |
USD |
4.1% |
||
|
23:01 |
GBP |
-31 |
||
|
May 31 |
5:45 |
CHF |
0.1% |
|
|
31st-3rd |
EUR |
0.8% |
||
|
6:45 |
EUR |
-2.9% |
||
|
7:55 |
EUR |
19K |
||
|
9:00 |
EUR |
2.6% |
||
|
12:15 |
USD |
119K |
||
|
12:30 |
USD |
2.2% |
||
|
12:30 |
USD |
370K |
||
|
13:45 |
USD |
56.2 |
||
|
Jun 1 |
TBD |
GBP |
||
|
7:15 |
CHF |
4.2% |
||
|
7:30 |
CHF |
46.9 |
||
|
7:45 |
EUR |
43.8 |
||
|
8:30 |
GBP |
50.5 |
||
|
9:00 |
EUR |
10.9% |
||
|
12:30 |
USD |
115K |
||
|
12:30 |
USD |
8.1% |
||
|
12:30 |
USD |
0.0% |
||
|
12:30 |
USD |
0.2% |
||
|
12:30 |
USD |
0.3% |
||
|
14:00 |
USD |
54.8 |
Click here for updated GBP/USD News.
Originally posted here
