GBP/USD Daily Fundamental Forecast – April 25, 2017

The GBP/USD is trading higher but inside a tight and narrow range for a fifth day. The price action suggests that investors are waiting for news before making their next move.

Earlier today, the U.K. issued a report that showed the government’s deficit fell to its lowest level since the start of the financial crisis in the last financial year, but it was still slightly higher than official forecasts.

According to data from the Office for National Statistics, public sector net borrowing excluding taxpayer-backed banks, decreased by 20 billion British Pounds in the year to March 2017, to a total of 52 billion British Pounds.

Earlier, the Office for Budget Responsibility had predicted a full-year reduction of 20.3 billion British Pounds only last month, but the target was missed as borrowing jumped at the end of the period.

The report also showed that monthly borrowing rose 5.1 billion British Pounds in March compared to the 3.1 billion predicted by economists.

Finally, the government’s total debt excluding the banks grew to 86.6 percent of gross domestic product, 3 percentage points higher than in March 2016. The debt to GDP ratio is expected to peak at 88.8 percent next year, according to figures released alongside last month’s budget.

Today’s U.S. reports include the monthly HPI which is expected to show a 0.1% increase. The S&P/CS Composite-20 HPI report is expected to show an annual 5.7% increase.

The Conference Board’s Consumer Confidence report is expected to come in at 123.67, down from 125.6. New Home Sales are expected to come in at 590K units, down from 592K. The Richmond Manufacturing Index is forecast to come in at 18, down from 22.