By FXEmpire.com
Analysis and Recommendations:
The GBP/USD is currently exchanging at 1.6103. The pound has been able to sustain the 1.61 price now since late last week, after having a difficult breaking through the 1.60 level the sterling has been able to maintain.
The GBP/USD was the standout performer of last week as strong economic data, including a shift in a key BOE policymaker’s outlook, pushed the pair up over 300 pips. Cable has been one the strongest pairs over the past few days as it has benefited both from safe heaven flows and better than expected economic data. With the summer Olympics coming up, we could see another boost to spending.
U.K. banks will present a mixed picture when they publish first-quarter results in the coming weeks, as those with a greater international presence continue to muscle ahead of more domestic focused rivals, analysts say.
The dollar has been stronger in today’s session against most of the majors except in this pair. With the FOMC two day meeting starting on Tuesday, it could be crazy for the USD and its partners.
There is a clear division among the FOMC policy makers on when the Fed should start tightening monetary policy. Some policy makers have called for an exit and rate hikes as early as this year, while a couple of committee members felt that policy accommodation should continue until 2016. With some of the recent U.S. economic data beginning to show signs of weakness and forecasts predicting slower economic growth, it would not be surprising to see the Fed maintaining a dovish stance and expressing a cautious outlook on the economy and the labor market, but stopping short of announcing another round of quantitative easing at this meeting.
However, QE3 will not be completely out of the picture and will remain as a viable option, especially if the occasional soft spots in the U.S. economic data become a persistent trend of deteriorating economic conditions lasting for at least a couple of months. Although additional quantitative easing may not come until the second half of the year or simply not at all, the future fate of the U.S. dollar will continue to depend on QE3 expectations and the Fed’s next move.
Economic Data for April 23, 2012 actual v. forecast
|
AUD |
PPI (QoQ) |
-0.3% |
0.4% |
0.3% |
|
CNY |
Chinese HSBC Manufacturing PMI |
49.10 |
48.30 |
|
|
EUR |
French Business Survey |
95 |
96 |
98 |
|
EUR |
French Manufacturing PMI |
47.3 |
47.2 |
46.7 |
|
EUR |
French Services PMI |
46.4 |
50.2 |
50.1 |
|
EUR |
German Manufacturing PMI |
46.3 |
49.0 |
48.4 |
|
EUR |
German Services PMI |
52.6 |
52.3 |
52.1 |
|
EUR |
Manufacturing PMI |
46.0 |
48.2 |
47.7 |
|
EUR |
Services PMI |
47.9 |
49.4 |
49.2 |
|
EUR |
Italian Consumer Confidence |
89.0 |
96.5 |
96.3 |
|
TWD |
Taiwanese Industrial Production (YoY) |
-3.4% |
-6.8% |
8.4% |
|
EUR |
German 12-Month Bubill Auction |
0.074% |
0.077% |
|
|
Wholesale Sales (MoM) |
1.6% |
-1.0% |
-1.1% |
|
|
EUR |
French 3-Month BTF Auction |
0.090% |
0.084% |
|
|
EUR |
French 6-Month BTF Auction |
0.121% |
0.119% |
|
|
EUR |
French 12-Month BTF Auction |
0.250% |
0.249% |
|
|
MXN |
Mexican Retail Sales (YoY) |
7.6% |
5.0% |
4.4% |
Economic Events scheduled for April 24, 2012 that affect the European and American Markets
07:00 EUR Finnish Unemployment Rate 7.40%
The unemployment rate represents the number of unemployed persons expressed as a percentage of the labor force. The unemployment rate for a particular age/sex group is the number of unemployed in that group expressed as a percentage of the labor force for that group.
10:00 EUR Industrial New Orders (MoM) -0.5% -2.3%
Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
15:00 USD CB Consumer Confidence 70.3 70.8
Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.
15:00 USD New Home Sales 320K 313K
New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated
Government Bond Auctions (this week)
Apr 24 00:30 Japan Auctions 20Y JGBs
Apr 24 08:30 Holland Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction
Apr 24 08:30 Spain 3 & 6M T-bill auction
Apr 24 09:10 Italy Auctions CTZ/BTPei
Apr 24 14:30 UK Details Conventional Gilt auction on May 01 & I/L auction on May 03
Apr 24 17:00 US Auctions 2Y Notes
Apr 25 09:10 Sweden Auctions T-bills
Apr 25 09:30 Germany Eur 3.0bn new Jul 2044 Bund
Apr 25 14:30 Sweden Details nominal bond auction on May 02
Apr 25 17:00 US Auctions 5Y Notes
Apr 26 00:30 Japan Auctions 2Y JGBs
Apr 26 09:10 Italy BOT auction
Apr 26 14:30 Sweden Details I/L bond auction on May 03
Apr 26 17:00 US Auctions 7Y Notes
Apr 27 09:10 Italy BTP/CCTeu auction
Click here for further GBP/USD Forecast.
Originally posted here
