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GBP/USD Forecast Dec. 23, 2011, Fundamental Analysis

By:
FX Empire Editorial Board
Updated: Mar 5, 2019, 13:24 UTC

On Thursday, the pound pared its advance against the dollar after downbeatU.S.growth report which enhanced demand on the dollar as a refuge. The 3q GDP

GBP/USD Forecast Dec. 23, 2011, Fundamental Analysis

GBP/USD Forecast Dec. 23, 2011, Fundamental Analysis
GBP/USD Forecast Dec. 23, 2011, Fundamental Analysis
On Thursday, the pound pared its advance against the dollar after downbeatU.S.growth report which enhanced demand on the dollar as a refuge.

The 3q GDP third reading showed a downside revision to 1.8% from second reading of 2.0%, while personal consumption also was revised down to 1.7% from 2.3%.

The data caused some frustration among investors as they expected improvement after the latest wave of upbeat data, reminding that the Fed announced recently it will not expand stimulus.

The downbeat report offset the positive impact of the better-than-expected U.K. 3q GDP which was upwardly revised to 0.6% from the preliminary and median estimated of 0.5%.

Other data from the U.S. signaled slight improvement in initial jobless claims for the week ended Dec. 17 to 364,000 from 368,000 a week before.

Moreover, Fitch Ratings mentioned on Wednesday “the high and rising federal and general government debt burden is not consistent with the U.S. retaining its ‘AAA’ status despite its other fundamental sovereign credit strengths,” yet it said probably there will be no downgrade action before 2013.

Also on Wednesday, the market was revived with fears after the ECB offered 489 billion euros of three-year funds to 523 European banks, above estimtes of 310 billion euros, igniting concerns European banks are heavily dependent on the ECB funds.

On Friday, the week ends with the release of U.K. BBA loans for house purchase for the month of Nov. will be released at 09:30 GMT and the index of services for the Oct. In the U.S., durable goods report which is predicted to show 2.1% advance in Nov. from the prior 0.7% drop will be out at 13:30 GMT.

The pair is expected to be affected by the data, yet it may also follow the general trend in the market which is focusing on the latest developments in the euro region.

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