GBP/USD Fundamental Analysis – August 27, 2015- Forecast

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Published: Aug 26, 2015, 12:04 UTC

Analysis and Recommendations: The GBP/USD dipped 58 points as the dollar regained some of its losses after several Fed speakers say the Fed is not looking

GBP/USD Fundamental Analysis – August 27, 2015- Forecast

Analysis and Recommendations:

The GBP/USD dipped 58 points as the dollar regained some of its losses after several Fed speakers say the Fed is not looking at short term currency problems from China. Consumer confidence in the US reported at a new high as the greenback gained 61 points which weighed on the pound. Cable is trading at 1.5631.

Trade-weighted sterling hit a 7-year high of 94.80 last week, supported by comments this month from BoE Governor Mark Carney that the decision to raise rates would likely come into “sharper relief” at the turn of the year.

Recent UK economic data has sent mixed signals. The housing market and rebound in core inflation look strong enough to warrant higher interest rates, analysts say, but retail sales figures were well short of expectations.

“As markets are currently pricing the BoE to raise rates even later, we see little risk to our call for a stronger sterling and continue to recommend an overweight position.

Money markets have pushed out the timing for a Bank of England (BoE) hike to around the third quarter of next year compared with early 2016 when the central bank published its quarterly inflation report three weeks ago.

Fears of a global slowdown have intensified in recent days after China devalued its currency and data pointed to further signs of weakness. These factors have deepened a sell-off in Chinese stocks and triggered volatility in global stock markets.

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.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock	-7.300M	1.900M	-2.300M
NZD	Trade Balance (MoM) (Jul)	-649M	-750M	-194M
NZD	Trade Balance (YoY) (Jul)	-2,690M	-2,660M	-2,850M
AUD	Construction Work Done (QoQ) (Q2)	1.6%	-1.5%	-0.8%
GBP	BBA Mortgages	46.0k	46.0k	44.8k

Upcoming Economic Events that you should be monitoring:

Thursday, August 27, 2015

Cur.	Event	Actual	Forecast	Previous
AUD	Private New Capital Expenditure		-2.5%	-4.4%
GBP	Nationwide HPI (YoY) (Aug)		3.1%	3.5%
GBP	Nationwide HPI (MoM) (Aug)		0.4%	0.4%
EUR	Spanish GDP (QoQ) (Q2)		1.0%	1.0%
RUB	Central Bank reserves (USD)			362.9B
USD	GDP (QoQ) (Q2)		3.2%	2.3%
USD	GDP Price Index (QoQ) (Q2)		2.0%	2.0%
USD	Initial Jobless Claims		274K	277K
USD	Pending Home Sales (MoM) (Jul)		1.0%	-1.8%