GBP/USD Fundamental Analysis August 21, 2014 Forecast

Analysis and Recommendations:

The GBP/USD recovered 31 points adjusting to trader’s overreaction to CPI and PPI data yesterday and after the release of MPC minutes today. The pound is trading at 1.6648. The GBPUSD hit 4 month lows around the 1.6600 handle. UK inflation numbers came in at 1.6% vs the expected 1.8% which led to a large scale weakening of the currency, aiding the push towards 1.6600 into the early morning session today.

Sterling rebounded from four-month lows against the dollar on Wednesday after Bank of England minutes showed two policymakers voted for an interest rate hike in August.

Martin Weale and Ian McCafferty both voted to start raising interest rates this month, becoming the first officials to do so in more than three years.

Some in the market had expected only one member of the bank’s Monetary Policy Committee at most to vote for a rate rise and news that two members favoured such a move prompted the market to bring forward expectations for a first UK interest rate rise to five months’ time.

FxEmpire provides in-depth analysis for each currency and commodity 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.

Economic Data August 20, 2014 actual v. forecast

 

Upcoming Economic Events that you should be monitoring

Government Bond Auction

Date Time Country 

Aug 28 Tentative              EUR       Italian 10-y Bond Auction

Sep 8    Tentative              EUR       Italian 10-y Bond Auction

Sep 10   6:01pm                USD       10-y Bond Auction

Sep 11 Tentative               EUR       German 10-y Bond Auction