GBP/USD Fundamental Analysis March 28, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

The GBP/USD is currently at 1.5964 after successfully touching the 1.60 line, but unable to hold it. The USD has slowly been picking up steam, recovering from remarks by the Fed Chief. As Mr. Bernanke made mention of possible monetary easing, investors ran from the USD, pushing its trading partners and gold straight upwards and the USD collapsing. Today, there has been buyer’s remorse, and profit taking from gold buyers. There was little to support the move by the Sterling, except a minor report on on Distributive Trade, which came in better than forecast.

The USD is expected to pick up momentum in later today’s trading in the US and early trading tomorrow.

There are a handful of important economic reports due in the UK on Wednesday which will determine the movement of the pound.

In the US today, markets hardly took notice of two negative reports.

Home prices in the U.S. fell for the fifth month in a row in January to the lowest level since early 2003, a closely followed index showed on Tuesday. The S&P/Case-Shiller 20-city composite index fell 0.8%.

A gauge of U.S. consumer confidence declined in March due to lower employment expectations, while views on the present situation rose to the highest level since 2008, the Conference Board reported Tuesday. The consumer-confidence gauge fell to 70.2 in March from a February reading of 71.6. A prior estimate had pegged February’s confidence level at 70.8.

Economic Data for March 27, 2012 actual v. forecast

Mar. 27	JPY	CSPI (YoY)		-0.6%	-0.4%	-0.4%
CHF	Consumption Indicator	0.87	0.93
EUR	German Import Price Index (MoM)	1.0%	1.0%	1.3%
EUR	GfK German Consumer Climate	5.9	6.2	6.0
EUR	French Consumer Confidence	87	83	82
EUR	Netherlands GDP (YoY)	-0.6%	-0.7%	-0.7%
HKD	Hong Kong Trade Balance	-45.8B	-15.0B	-8.9B
EUR	Italian 2-Year CTZ Auction	2.352%	3.013%
GBP	CBI Distributive Trades Survey	0	-4	-2
TRY	Turkish Interest Rate Decision	5.75%	5.75%	5.75%
HUF	Hungarian Interest Rate Decision	7.00%	7.00%	7.00%
USD	S&P/CS Home Price Indices Composite – 20 (YoY)	-3.8%	-3.8%	-4.1%
USD	CB Consumer Confidence	70.2	70.3	71.6
USD	Richmond Manufacturing Index	7	18	20

Economic Events March 28, 2012 Europe and America

06:30 EUR French GDP (QoQ) 0.2% 0.2%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

09:30 GBP Business Investment (QoQ) -5.4% -5.6%

Business Investment measures the change in the total inflation-adjusted value of capital expenditure made by companies in the private sector.

09:30 GBP Current Account -8.4B -15.2B

The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable affect on the GBP.

09:30 GBP GDP (QoQ) -0.2% -0.2%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

T.B.D. EUR German CPI (MoM) 0.3% 0.7%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.

13:30 USD Core Durable Goods Orders (MoM) 1.5% -3.0%

13:30 USD Durable Goods Orders (MoM) 3.0% -3.7%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity. Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.

Government Bond Auctions (this week)

Mar 28 09:10 Italy BOT auction

Mar 28 17:00 US Auctions 3Y Notes

Mar 29 09:10 Italy BTP/CCTeu auction

Mar 29 17:00 US Auctions 7Y Notes

Originally posted here