GBP/USD Monthly Fundamental Forecast – September 2016

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Updated: Sep 1, 2016, 12:54 UTC

The GBP/USD ended the month dead center of its trading range at 1.3113 and is a strong sell moving into September as the US dollar is expected to continue

The GBP/USD ended the month dead center of its trading range at 1.3113 and is a strong sell moving into September as the US dollar is expected to continue to gain and Brexit negotiations will have an effect on the greenback. With reports surfacing that UK Prime Minister Theresa May is chairing a Brexit brainstorming meeting at Chequers, we may find that developments surrounding our Brexit move forward quicker than many first thought. Whilst it is possible that article 50 will not be triggered for another two years or more, any solid indications of how we will facilitate it and the likely time-frame, should help to alleviate some of the current pressure on Sterling moving forward.

Economic data that is now being published since the vote to leave the European Union has not been as bad as expected and indeed UK consumer confidence is back to its best level since 2013 which has been reflected in Sterling exchange rates. The latest UK GDP data came out as anticipated with levels for the previous quarter at 0.6% which helped to provide Sterling with strength vs the single currency. UK manufacturing data published earlier in the week showed levels back to the best in 2 years which demonstrates that the impact of the Brexit vote was not as bad as expected.

towards the end of the month the UK’s Retail Sales Figures for July were better than expected, and this week the weak Pound has resulted in the UK’s Manufacturing Output reaching a 2 year high as people overseas are keen to pick up goods at low prices. These positive sets of data, coupled with today’s Gross Domestic Product estimates coming out as expected, have boosted sentiment towards the Pound as this has been reflected within currency markets as the Pound has gained almost 3 cents vs the US Dollar.

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September Major Economic Events
Date	Country	Name	Volatility	Previous
9/1/2016	USD	ISM Manufacturing PMI	3	52.6
9/1/2016	USD	ISM Prices Paid	3	55
9/2/2016	USD	Nonfarm Payrolls	3	255
9/2/2016	USD	Unemployment Rate	3	4.9
9/6/2016	AUD	RBA Interest Rate Decision	3	1.5
9/6/2016	AUD	RBA Rate Statement	3
9/6/2016	EUR	Gross Domestic Product Y	3
9/6/2016	EUR	Gross Domestic Product Q	3
9/6/2016	GBP	Inflation Report Hearings	3
9/7/2016	GBP	NIESR GDP Estimate (3M)	3	0.3
9/7/2016	CAD	BOC Rate Statement	3
9/7/2016	CAD	BoC Interest Rate Decision	3	0.5
9/8/2016	EUR	ECB Interest Rate Decision	3	0
9/8/2016	EUR	ECB Monetary press conference	3
9/9/2016	GBP	Consumer Inflation Expectations	3	2
9/13/2016	GBP	Core Consumer Price Index Y	3	1.3
9/13/2016	GBP	Consumer Price Index Y	3	0.6
9/15/2016	AUD	Fulltime employment	3	-45.4
9/15/2016	AUD	Part-time employment	3	71.6
9/15/2016	AUD	Employment Change	3	26.2
9/15/2016	AUD	Participation Rate	3	64.9
9/15/2016	AUD	Unemployment Rate	3	5.7
9/15/2016	GBP	BoE Interest Rate Decision	3	0.25
9/15/2016	GBP	BoE Asset Purchase Facility	3	435
9/15/2016	GBP	Monetary Policy Summary	3
9/15/2016	USD	Retail control	3	0
9/15/2016	USD	Retail Sales – M	3	0
9/15/2016	USD	Retail Sales ex Autos – M	3	-0.3
9/20/2016	AUD	RBA Meeting’s Minutes	3
9/20/2016	JPY	BoJ Press Conference	3
9/21/2016	JPY	BoJ Interest Rate Decision	3	-0.1
9/21/2016	JPY	BoJ Monetary Policy Statement	3
9/21/2016	EUR	Non-monetary policy’s ECB meeting	3
9/21/2016	USD	FOMC Economic Projections	3
9/21/2016	USD	Fed’s Monetary Policy Statement	3
9/21/2016	USD	Fed Interest Rate Decision	3	0.5
9/21/2016	USD	FOMC Press conference	3
9/22/2016	NZD	RBNZ Interest Rate Decision	3	2
9/26/2016	USD	Durable Goods Orders	3	4.4
9/26/2016	USD	Durable Goods Orders CORE	3	1.5
9/29/2016	USD	Gross Domestic Product Annualized	3	1.1
9/30/2016	USD	Fed’s Yellen Speech	3