GBP/USD Fundamental Analysis July 6, 2012, Forecast

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Analysis and Recommendations:

The GBP/USD fell to 1.5527 and is trading flat following the BoE’s decision to increase the size of its asset purchase program by £50bn, to £375bn, as expected.  Rates remain unchanged at 0.5%, and details of the voting will only be released with the minutes on July 18th. In the statement the MPC noted a particularly fragile economy, with limited output growth and slowing exports combined with Euro-area risks weighing heavily on the outlook. However, the decision to ease had been widely disseminated by speeches from many members of the BoE’s MPC, including some of whom had abstained from voting for easing at the previous meeting.

The ECB also made news today, dropping its key lending rate by .25 to the lowest in history, followed by pessimistic statements on the EU economy the euro plunged to trade below 1.24

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 for July 5, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jul. 05

 

AUD

 

 

 

Trade Balance 

-0.28B

 

-0.50B 

 

-0.03B 

  

 

 

GBP

 

 

 

Halifax House Price Index (MoM) 

1.0%

 

-0.2% 

 

0.4% 

  

 

 

EUR

 

 

 

Spanish 10-Year Obligacion Auction 

6.430%

 

 

 

6.044% 

 

 

 

 

EUR

 

 

 

German Factory Orders (MoM) 

0.6%

 

0.2% 

 

-1.4% 

  

 

 

GBP

 

 

 

Interest Rate Decision 

0.50%

 

0.50% 

 

0.50% 

 

 

 

 

GBP

 

 

 

BOE QE Total 

375B

 

375B 

 

325B 

 

 

 

 

EUR

 

 

 

Interest Rate Decision 

0.75%

 

0.75% 

 

1.00% 

 

 

 

 

USD

 

 

 

ADP Nonfarm Employment Change 

176K

 

105K 

 

136K 

  

 

 

USD

 

 

 

Initial Jobless Claims 

374K

 

385K 

 

388K 

  

 

 

EUR

 

 

 

ECB Press Conference 

 

 

 

 

 

 

 

 

 

USD

 

 

 

Continuing Jobless Claims 

3306K

 

3300K 

 

3302K 

  

 

 

USD

 

 

 

ISM Non-Manufacturing Index 

52.1

 

53.0 

 

53.7 

  

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

Date

Time

Currency

 Event

Forecast

Previous

Jul 6

7:00

CHF

Foreign Currency Reserves

 

303.8B

7:15

CHF

CPI m/m

-0.3%

0.0%

8:30

GBP

PPI Input m/m

-2.1%

-2.5%

10:00

EUR

German Industrial Production m/m

0.3%

-2.2%

12:30

USD

Non-Farm Employment Change

92K

69K

12:30

USD

Unemployment Rate

8.2%

8.2%

 

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