GBP/USD Fundamental Analysis August 10, 2012, Forecast

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By FX Empire Analyst - Barry Norman
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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

02:30

 

AUD

 

 

 

Employment Change 

14.0K

 

10.0K 

 

-28.3K 

   

 

02:30

 

AUD

 

 

 

Unemployment Rate 

5.2%

 

5.3% 

 

5.3% 

   

 

02:30

 

CNY

 

 

 

Chinese CPI (YoY) 

1.8%

 

1.7% 

 

2.2% 

 

 

 

02:30

 

CNY

 

 

 

Chinese PPI (YoY) 

-2.9%

 

-2.5% 

 

-2.1% 

 

 

 

02:30

 

CNY

 

 

 

Chinese CPI (MoM) 

0.1%

 

-0.1% 

 

-0.6% 

 

 

 

05:00

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

 

06:30

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.4%

 

20.5% 

 

20.4% 

 

 

 

06:30

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

9.2%

 

9.8% 

 

9.5% 

 

 

 

06:30

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

13.1%

 

13.7% 

 

13.7% 

 

 

 

09:30

 

GBP

 

 

 

Trade Balance 

-10.1B

 

-8.6B 

 

-8.4B 

 

 

 

13:15

 

CAD

 

 

 

Housing Starts 

208.5K

 

213.0K 

 

222.1K 

   

 

13:30

 

CAD

 

 

 

Trade Balance 

-1.8B

 

-1.0B 

 

-0.9B 

   

 

13:30

 

USD

 

 

 

Trade Balance 

-42.9B

 

-47.5B 

 

-48.0B 

   

 

13:30

 

USD

 

 

 

Initial Jobless Claims 

361K

 

370K 

 

367K 

   

 

13:30

 

USD

 

 

 

Continuing Jobless Claims 

3332K

 

3280K 

 

3279K 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Previous

Aug 10

6:45

EUR

French Industrial Production m/m

-1.9%

 

8:30

GBP

PPI Input m/m

-2.2%

 

12:30

USD

Import Prices m/m

-2.7%

 

18:00

USD

Federal Budget Balance

-59.7B

Government Bond Auctions

Date  Time  Country 

Aug 10  10:00  Belgium

Aug 13  09:10  Italy

Aug 13  09:10  Norway

Aug 13  09:30  Germany

Aug 14  09:10  Greece 

Aug 14  09:10  Italy

Aug 14  09:30  Belgium

Aug 14  14:30  UK

Aug 15  09:10  Sweden

Aug 16  09:30  UK

Aug 16  15:00  US

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