GBP/USD Fundamental Analysis July 19, 2012, Forecast

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Analysis and Recommendations:

The GBP/USD is trading at 1.5600 down 0.0053. UK claimant count was much higher than market forecast.

Sterling has weakened 0.4% from yesterday’s close, as movement is driven by the market’s reaction to dovish BoE minutes release.  The tone of the minutes indicated a persistent concern over global growth and the potential for contagion emanating from the Eurozone, generating a dovish bias to policy given the implications for a weakened inflation profile as a result of a widened output gap.  Policymakers voted 7-2 to increase asset purchases by £50bn (£75bn was discussed) to £375bn, with abstentions from members Dale and Broadbent, both of whom preferred to see the simulative impact of the recently announced Funding for Lending Scheme. 

Although the Bank Rate was held at 0.5%, the July meeting was the second in which cuts were deliberated.  On a brighter note, Chancellor Osborne announced a £51bn infrastructure spending program to help growth.  Meanwhile, employment was relatively strong, with the unemployment rate falling to 8.1% and employment increasing 181K on a 3 month basis.

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 July 19, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jul. 18

 

JPY

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

GBP

 

 

 

Average Earnings Index +Bonus 

1.5%

 

1.4% 

 

1.4% 

 

 

 

 

GBP

 

 

 

Claimant Count Change 

6.1K

 

5.0K 

 

6.9K 

   

 

 

GBP

 

 

 

MPC Meeting Minutes 

 

 

 

 

 

 

 

 

 

USD

 

 

 

Building Permits 

0.755M

 

0.765M 

 

0.784M 

 

 

 

 

USD

 

 

 

Housing Starts 

0.760M

 

0.745M 

 

0.711M 

   

 

 

USD

 

 

 

Fed Chairman Bernanke Testifies 

 

 

 

 

 

 

 

 

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

Date

Time

Currency

 Event

Previous

Jul 19

6:00

CHF

Trade Balance

2.48B

8:00

EUR

Current Account

4.6B

8:30

GBP

Retail Sales m/m

1.4%

12:30

USD

Unemployment Claims

 

14:00

USD

Existing Home Sales

4.55M

14:00

USD

Philly Fed Manufacturing Index

-16.6

Jul 20

6:00

EUR

German PPI m/m

-0.3%

8:30

GBP

Public Sector Net Borrowing

15.6B

Government Bond Auctions

Date  Time  Country 

Jul 19  00:30  Japan

Jul 19  08:30  Spain

Jul 19  08:50  France

Jul 19  09:30  UK

Jul 19  09:50  France

Jul 19  15:00  US

Jul 19  17:00  US

Jul 23- n/a  UK

Jul 23  09:30  Germany

Jul 24  08:30  Netherlands

Jul 24  08:30  Spain 

Jul 24  15:30  Italy

Jul 24  17:00  US

Jul 25  09:30  Germany

Jul 25  15:30  Italy

Jul 25  17:00  US

Jul 26  00:30  Japan

Jul 26  09:10  Italy

Jul 27  09:10  Italy

Jul 27  17:00  US

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