GBP/USD Fundamental Forecast – May 4, 2016

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Published: May 3, 2016, 12:44 UTC

The GBP/USD gained 29 points to trade at 1.4703 as the US dollar continued to decline. The pound climbed to its highest level since 2016 began against the

GBP/USD Fundamental Forecast – May 4, 2016

The GBP/USD gained 29 points to trade at 1.4703 as the US dollar continued to decline. The pound climbed to its highest level since 2016 began against the dollar in early trading Tuesday, putting sterling back in positive territory against the greenback for the year so far. The pound/dollar exchange rate rose above 1.476 for the first time since the first week of January, up 0.69%.

The Wall Street Journal printed that the pound could fall to as low as $1.20 in the event of a vote to leave the EU, according to Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics.

“Overseas investors likely would give the U.K. a wide berth, at least until some clarity had been achieved on Britain’s new trade agreements with Europe and the shape of new regulations,” said Mr. Tombs in a research note emailed to clients.

Sterling rose half a per cent against a broadly weaker US dollar on Tuesday, hitting its highest since the start of January and extending its gains against the greenback into a fourth straight week. The pound has recovered steadily since reaching long-term lows around $1.38 in late February after the announcement of a June date for the Brexit referendum on European Union membership.

It has surged in the past two weeks as bookmakers’ odds shifted back against the “Out” camp in a vote seen by financial investors as a large risk to the British and European economies. (BusinessLine)

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Upcoming Economic Events that you should be monitoring:

Wednesday, May 4, 2016

Cur.	Event	Actual	Forecast	Previous
	Japan – Constitution Day
AUD	Building Approvals (MoM) (Mar)		-3.0%	3.1%
CNY	Caixin Manufacturing PMI (Apr)		49.9	49.7
AUD	Interest Rate Decision (May)		2.00%	2.00%
GBP	Manufacturing PMI (Apr)		51.2	51.0