On Thursday trading, the pairhovered near 1.5500 crucial level amid volatile trading including a mix of correctional movements and mounting concerns from the euro area, where volume was not high due to thanks giving holiday in the United States. The market experienced some correctional movements in the early trading after the drop in shares and high-yielding assets this week, boosted by an upbeat German IFO report which showed that business climate gauge advanced to 106.6 in Nov. from 106.4 in Oct., compared with estimates of 105.2, providing some hopes amid the latest downbeat data and ongoing European debt woes. On the other hand, worries form the euro area remained as the conce
GBP/USD Forecast Nov. 25, 2011, Fundamental Analysis
rns that haunted markets on Wednesday after the rise in German bond yields and decline in demand in the auction dominated investors’ behavior. Fitch ratings lowered Portugal’s credit rating by one notch sending it to junk status with negative outlook. Moreover, the pound remained near seven-week low versus the greenback even after the news showing that U.K. growth in the third quarter remained unrevised at 0.5%. The pound has been recently affected by the fears in markets which is triggering demand on the dollar as a refuge as well as expectations the BoE would add further stimulus to boost growth. Policy maker David Miles said on Wednesday the “return to more normal rates of growth is something that is going to be a gradual process over the course of the next two years,” while Ben Broadbent said there was a chance the U.K. may experience another recession. The week ends with the release of no data from both economies which suggest that the pair will follow the general sentiment in market. Probably, the main focus will remain the latest developments from the euro area amid talks between European leaders regarding the role of the ECB in solving the crisis.
Originally posted here
