GBP/USD Fundamental Analysis August 10, 2012, Forecast

Posted August 09, 2012 17:54 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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Analysis and Recommendations:

The GBP/USD declined today, after a slew of negative data from China weighed on the markets but the UK trade balance numbers really upset the GPB. Markets were already prepared for a poor report, but not for the huge variance. Trade was expected to show a -8.6bn but printed at -10.1bn well below forecast.

A disappointing visible trade deficit, that widened from ‐8.3bn to ‐£0.1bn on the back of slowing exports (‐8.3%m/m). The weakness in exports was more exaggerated in non EU27, which fell by 9.5%m/m, suggesting that the export pressures on the UK are not just Euro‐centric. Today’s release also suggests that trade will prove a net drag to the UK economy and that the backdrop is deteriorating relatively quickly. Accordingly, expectations for an expansion of the BoE’s asset purchase program in November have begun to increase again.

Also the DX reversed after US trade balance data weighing on 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.

Economic Data August 9, 2012 actual v. forecast

Aug. 09