GBP/USD Fundamental Analysis – Forecast for the week of September 19, 2016

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Published: Sep 17, 2016, 07:02 UTC

The GBP/USD tumbled on comments from BoE Carney and the banks decision to hold fire at its meeting on Thursday. The pound closed the week at 1.3001 and is

GBP/USD Fundamental Analysis – Forecast for the week of September 19, 2016

The GBP/USD tumbled on comments from BoE Carney and the banks decision to hold fire at its meeting on Thursday. The pound closed the week at 1.3001 and is a strong sell moving into the new week. The pair is down 2% for the week and almost 12% on a year to date basis.

It was widely anticipated that the BoE would keep its monetary stance unchanged due to which there was no drastic volatility in the market. If we observe carefully, on 13th and 14th Sep’16, GBPINR was trading at lower levels and trading volumes were light too as disappointing inflation and employment data from Britain dented the investor sentiment. However, situations have changed after the result of BoE monetary policy review where the policymakers kept the borrowing rates unchanged and hinted at the possibility of future rate cuts in 2016.

The increase in consumer spending has not only improved the inflation rate but has also helped other sectors of Britain to gain strong footing. Manufacturing, service and construction sectors have revived owing to sudden upsurge in the solid inflows of new work from both domestic and export sources, the latter aided by the sterling exchange rate. Furthermore, stronger demand, product launches and clients committing to new and previously postponed contracts have worked in favor for the Britain’s economy. After the Brexit catastrophe, property shares had plunged which forced a series of funds in the sector to halt trading. However, now the real estate market is slowly regaining confidence. Business investments have also got a boost. All the above factors have kept the GDP growth rate unchanged at 0.6 percent for quarter ending Jun’16 in spite of the Brexit catastrophe.

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This Week’s Economic Events That You Should Be Monitoring:

Date	Country	Name	Volatility	Previous
9/20/2016	AUD	RBA Meeting’s Minutes	3
9/20/2016	CAD	BoC Governor Poloz	3
9/21/2016	AUD	Mid-Year Economic Outlook	3
9/21/2016	JPY	BoJ Interest Rate Decision	3	-0.1
9/21/2016	JPY	BoJ Monetary Policy Statement	3
9/21/2016	JPY	BoJ Press Conference	3
9/21/2016	USD	FOMC Economic Projections	3
9/21/2016	USD	Fed’s Monetary Policy Statement	3
9/21/2016	USD	Fed Interest Rate Decision	3	0.5
9/21/2016	USD	FOMC Press conference	3
9/21/2016	NZD	RBNZ Interest Rate Decision	3	2
9/22/2016	EUR	ECB President Draghi’s Speech	3
9/23/2016	AUD	RBA’s Governor Lowe Speech	3