GBP/USD Fundamental Analysis August 27, 2012, Forecast

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Analysis and Recommendations:

The GBP/USD remained pretty much unchanged after the release of the revised 2Q GDP numbers, which were a bit more positive, but earlier in the day Business Investment data showed a continued decline.

UK GDP was revised higher to -0.5% q/q from -0.7% q/q in the initial estimate, in line with consensus expectations after data on industrial production, construction, and retail sales released since the first estimate of GDP was made public mechanically pointed to upward revisions in that ballpark. If the headline growth rate is adjusted a) to account for the lost working day due to the Queen’s Diamond Jubilee, and b) to remove the effect of some distortions in the construction data, then underlying growth was… still weak and probably just about on the right side of zero.

The bottom line is that despite the improvement to GDP via revisions, there remains a mammoth wedge between the storming pace of employment growth in the UK during Q2/Q3 and the non-existent GDP growth rate. The good news is that there should be a snap-back as the drag from the lost working day reverses. The big uncertainty is whether or not the Olympics added or subtracted from GDP growth. Clearly there were some reports that central London was deserted by shoppers and theatre goers to avoid congestion. However, transport into the capital, ticket sales, and tourism flows should have offset these

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 24, 2012 actual v. forecast 

Date

Time

 

Currency

 

Importance

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 24

00:30

 

AUD

 

 

 

RBA Governor Stevens Speaks 

 

 

 

 

 

 

 

 

09:30

 

GBP

 

 

 

Business Investment (QoQ) 

-1.5%

 

2.8% 

 

1.9% 

 

 

 

09:30

 

GBP

 

 

 

GDP (QoQ) 

-0.5%

 

-0.5% 

 

-0.7% 

 

 

 

09:30

 

GBP

 

 

 

GDP (YoY) 

-0.5%

 

-0.6% 

 

-0.8% 

 

 

 

13:30

 

USD

 

 

 

Core Durable Goods Orders (MoM) 

-0.4%

 

0.5% 

 

-2.2% 

  

 

13:30

 

USD

 

 

 

Durable Goods Orders (MoM) 

4.2%

 

2.4% 

 

1.6% 

  

 

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

Date

Time

Currency

Event

Previous

 Aug. 27

09:00

EUR

German Ifo Business Climate Index 

103.3 

 

09:00

EUR

German Current Assessment 

111.6 

 

09:00

EUR

German Business Expectations 

95.6 

Aug. 28

07:00

EUR

GfK German Consumer Climate 

5.9 

 

15:00

USD

CB Consumer Confidence 

65.9 

Aug. 29

01:00

EUR

German CPI (MoM) 

0.4% 

 

01:00

EUR

German CPI (YoY) 

1.7% 

Government Bond Auctions

Date Time Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

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About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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