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GBP/USD Fundamental Forecast – May 25, 2016

By:
Barry Norman
Published: May 24, 2016, 10:41 UTC

The GBP/USD soared today as Brexit fears lessened. The pound was able to gain steadily against a strong US dollar. BoE governor Carney said today

GBP/USD Fundamental Forecast – May 25, 2016

The GBP/USD soared today as Brexit fears lessened. The pound was able to gain steadily against a strong US dollar. BoE governor Carney said today “Questions about downside risks to the UK from a Leave win in the upcoming EU Referendum are sure to dominate, but perhaps more enlightening will be the officials’ views on some of the recent misses in the data (the PMIs in particular). With two members (including the hawkish Forbes) coming out in recent days to express concern over economic momentum, ‎this could mark an opportunity for other MPC members to take a more dovish turn.” The pound climbed to trade at 1.4581.

Sterling jumped 0.9 percent versus the euro and was 0.7 percent stronger at $1.4580, its first advance versus the greenback in three days. An ORB survey for the Daily Telegraph newspaper found older voters, previously found to back leaving the EU, are switching sides.

The Financial Times reported that Bank of England governor Mark Carney said he doesn’t expect policymakers to say anything further that is “substantially different” over the potential risks to the UK economy from a Brexit, after the Bank came under heavy fire over analysis published earlier this month.

The bank’s monetary policy committee was accused of overstepping the mark by campaigners in favor of leaving the European Union when it earlier this month warned that breaking ties with the EU could pose a risk to jobs, raise prices and cause a fall in the pound.

The MPC’s next policy decision will be announced on June 16, a week before the referendum is held.

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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Upcoming Economic Events that you should be monitoring:

Wednesday, May 25, 2016

Cur. Event Actual Forecast Previous
  USD API Weekly Crude Oil Stock     -1.140M  
  NZD Trade Balance (YoY) (Apr)   -3,940M -3,380M  
  NZD Trade Balance (MoM) (Apr)   60M 117M  
  AUD Construction Work Done (QoQ) (Q1)   -1.5% -3.6%  
  EUR EU Finance Ministers Meeting        
  USD Goods Trade Balance (Apr)   -60.10B -56.90B  
  USD FOMC Member Harker Speaks        
  USD Services PMI (May)   53.1 52.8  
  CAD Interest Rate Decision   0.50% 0.50%  
  USD Crude Oil Inventories     1.310M  
  USD FOMC Member Kashkari Speaks        
  USD FOMC Member Kaplan Speaks  

Government Bond Auctions

Date Time       Country           Auction

May 25 11:03 Sweden Sek 1bn 3.5% 2022 & Sek 3bn 1% 2026 bonds

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 25 19:00 US Holds 5Yr Notes Auction, 2Yr FRN

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero-coupon/BTPei auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

May 26 19:00 US Holds 7Yr Notes Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn Apr 2021 Bobl

Jun 01 11:30 UK 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction

 

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