GBP/USD Fundamental Analysis August 6, 2013 Forecast

Analysis and Recommendations:

The GBP/USD is the stellar performer today gaining 61 points after the release of services PMI which far exceeded expectations, reporting at 60.2 against estimates of 57.2. The US dollar traded in a tight range today waiting for manufacturing data from the US due later in the trading day. The UK housing sector has continued to show improvement from last couple of months. The UK PMI manufacturing and construction number improved at a faster pace with increase in spending. The Bank of England has kept its benchmark rate constant at 0.50% and maintained its 375B pound asset purchased program intact.

Last week, the cable depreciated 0.57% against the US dollar and settled at 1.5294 from previous close 1.5382. The major factor for the pound to weaken was a strengthening Dollar index. The economic readings from the UK mostly remained on a positive territory. The investor’s sentiment also improved on the back of growth in economy amidst consumer spending.

Sterling rose to the day’s high against the dollar after data showed growth in the U.K.’s services sector surged to a more than six-year high in July, elsewhere the FTSE 100 index nudged higher and gilts slipped on the release. Meanwhile, European stocks nudged up as investors welcomed a slight increase in the final release of the euro-zone purchasing manager’s index for July. The monthly services purchasing managers index for the U.K. rose to 60.2 in July from 56.9 in June. It is the seventh month of growth for the index, which now stands at its highest level since December 2006. Economists had expected the index to be little changed on the month at 56.8. A balance above 50 shows the sector is expanding.

All U.K. PMIs pointed upward in July and today’s Services PMI seem to confirm that survey evidence continues to point in the direction of further improvement in activity in the third quarter. The PMI data is the latest indication that the U.K. economy is recovering. It comes on the back of strong employment growth in June; new orders rising to their highest level since April 2004; and business confidence rising to a 15-month high. Elsewhere, the final release of services PMI for the euro zone marginally beat expectations at 49.8 in July from 48.3 in June. The composite PMI was revised slightly higher to 50.5.

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 5, 2013 actual v. forecast

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Government Bond Auction

Date Time Country 

Aug 06 09:10 Norway

Aug 06 09:15 Austria

Aug 06 09:30 UK

Aug 06 14:30 UK

Aug 06 17:00 US

Aug 07 09:30 Germany

Aug 07 10:00 Norway

Aug 07 15:30 Italy

Aug 07 17:00 US

Aug 08 09:30 UK

Aug 08 15:30 Italy

Aug 08 17:00 US

Aug 09 00:30 Japan

Aug 09 10:30 Belgium