GBP/USD Fundamental Forecast – July 29. 2016

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Published: Jul 28, 2016, 12:42 UTC

The GBP/USD dipped 61 points surprising markets as the dollar fell after data showed that housing prices continued to climb in July. The pound is trading

GBP/USD Fundamental Forecast – July 29. 2016

The GBP/USD dipped 61 points surprising markets as the dollar fell after data showed that housing prices continued to climb in July. The pound is trading at 1.3165. house prices according to Nationwide rose 0.5% month-on-month in July, up from 0.2% scored previously, while the yearly change printed 5.2%, improving from 5.1% in June. Both measures topped expectations.

In the previous session, UK GDP rose 0.6% in the second quarter of 2016, up from 0.4% booked in Q1. The year-on-year change improved slightly to 2.2% from 2.0% scored previously. Sterling failed to strengthen after the data and remained muted around $1.3130.

Nevertheless, the pound managed to post a strong rise on late Wednesday as the FOMC decision sparked a USD-dollar sell-off, despite the statement sounding relatively positive. Cable spiked around 150 pips, from $1.3100 to $1.3250, before erasing some of the gains.

In addition, the federal funds rate was kept in the 0.25-0.50% range. However, the greenback eased sharply and broadly after the decision.

The currency has found new footing at roughly 13% below where it was before Britain voted to leave the European Union and so far, it’s refusing to budge. This could suggest that investors don’t believe the Bank of England is paying close attention to the current crop of data and has already made up its mind about what it will do at its next rate-setting meeting on August 4.

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Friday, July 29, 2016

Currency	Name	Volatility	Previous	Consensus
JPY	BoJ Interest Rate Decision	3	-0.1	-0.2
JPY	BoJ Monetary Policy Statement	3
EUR	Gross Domestic Product YoY)	3	1.7	1.6
EUR	Gross Domestic Product (QoQ)	3	0.6	0.3
EUR	Consumer Price Index (YoY)	3	0.1
EUR	Consumer Price Index – Core (YoY)	3	0.9