GBP/USD Fundamental Forecast – April 28 2016

The GBP/USD traded in a narrow range, but still managed to finish higher at 1.4596, up 0.0016 or +0.11%, after the release of the latest UK GDP data and ahead of the release of the U.S. Federal Reserve monetary policy statement and interest rate decision.

Britain’s economy slowed sharply in the first three months of 2016 as factors unrelated to the looming in/out EU referendum put a brake on growth.

The Office for National Statistics (ONS) said there was no evidence for or against a “Brexit effect” on gross domestic product (GDP) as it reported that output had expanded by 0.4% in the first quarter – down from 0.6% in the final three months of 2015.

The government’s decision to hold a referendum was not taken until late February, and business groups cited the impact of weaker global trade and the new year turbulence in the financial markets as more likely explanations for the softness in growth.

On Tuesday, the U.S. Federal Open Market Committee kicked off its two-day meeting and is scheduled to release its statement on monetary policy Wednesday afternoon at 18:00 pm GMT. The central bank is widely expected to leave interest rates unchanged, but investors will be eyeing its monetary policy statement for clues on the timing of the next rate hike.

A dovish Fed should be supportive for the GBP/USD. If the Fed comes out with stronger language or more hawkish than expected then look for the British Pound to weaken against the U.S. Dollar.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Thursday, April 28, 2016

Government Bond Auctions

Date Time       Country           Auction

Apr 27 11:03 Sweden Holds bond auction

Apr 27 11:10 Italy Holds CTZ auction

Apr 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Apr 27 19:00 US 2-year FRN, 5-year note auctions

Apr 28 11:10 Italy Holds 5yr/10yr bond auctions

Apr 28 19:00 US Holds 7-year note auction