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GBP/USD Fundamental Forecast – August 1, 2016

By:
Barry Norman
Published: Jul 29, 2016, 13:01 UTC

The GBP/USD was flat today at 1.3165 as weakness in the pound was offset by the decline in the US dollar.  A survey of manufacturers from industry group

GBP/USD Fundamental Forecast – August 1, 2016

The GBP/USD was flat today at 1.3165 as weakness in the pound was offset by the decline in the US dollar.  A survey of manufacturers from industry group EEF showed business confidence dropped in factories across Britain, particularly in south-east England and Wales.

But a Lloyds Banking Group survey showed business confidence regained some lost ground after falling to a four-and-a-half-year low immediately following the referendum.

“The latest GfK consumer confidence survey adds to the evidence from other post-referendum surveys that have warned of a potentially sharp correction in the economy,” said RBC economist Sam Hill.

The GfK survey was worse than all forecasts in a Reuters poll that suggested consumer confidence would tick up from a reading of -9 in a one-off “Brexit special” version of the survey published three weeks ago.

Shockwaves from Britain’s vote to leave the European Union rocked the economy on Thursday, with thousands of jobs lost at one of the country’s biggest banks, big extra costs for Ford, and consumer confidence plunging.

Preparing for a Brexit-related slowdown, Lloyds Banking Group (LLOY.L) said it would cut a further 3,000 jobs. One of Britain’s biggest car dealerships, Inchcape, predicted growth in new car registrations would fall.

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Upcoming Economic Events that you should be monitoring:

Monday, August 1, 2016

Country Name Volatility Previous
AUD AiG Performance of Mfg Index 2 51.8
AUD TD Securities Inflation (YoY) 2 1.5
AUD TD Securities Inflation (MoM) 2 0.6
CNY Non-manufacturing PMI 2 53.7
AUD HIA New Home Sales (MoM) 2 -4.4
CNY NBS Manufacturing PMI 2 50
CNY Caixin Manufacturing PMI 2 48.6
EUR Markit Manufacturing PMI 2 53.7
EUR Markit Manufacturing PMI 2 51.9
GBP Markit Manufacturing PMI 2 49.1
USD Markit Manufacturing PMI 2 52.9
USD ISM Manufacturing PMI 3 53.2
USD ISM Prices Paid 3 60.5
USD Construction Spending (MoM) 2 -0.8

Government Bond Auctions

Date/Time Country Type

Aug 2   JPY                  10-Year JGB Auction                          -0.243%

Aug 2   USD                4-Week Bill Auction                           0.270%

 

 

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