GBP/USD Fundamental Analysis – August 7, 2015 – Forecast

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Published: Aug 6, 2015, 13:00 UTC

Analysis and Recommendations: The GBP/USD was flat ahead of Mark Carneys press conference at the conclusion of Super Thursday. The BoE held rates and

GBP/USD Fundamental Analysis – August 7, 2015 – Forecast

Analysis and Recommendations:

The GBP/USD was flat ahead of Mark Carneys press conference at the conclusion of Super Thursday. The BoE held rates and policy and the inflation report was fairly positive as the Bank saw signs of an improving economy. The pair is trading at 1.5605. Bank of England policy makers voted 8-1 to keep interest rates unchanged. Ian McCafferty was the lone dissenter, who backed a quarter-point rate hike to take the base rate to 0.75%.

Minutes of the meeting, which were for the first time published at the same time as the monthly monetary policy decision, said:

The near-term outlook for inflation is muted. The falls in energy prices of the past few months will continue to bear down on inflation at least until the middle of next year.

The Bank now expects inflation to remain at around zero for at least the next two months, before rising to its 2% target at the end of the monetary policy committee’s two-year forecast period, if interest rates are increased in line with the market’s expectations.

That would imply the first rate rise coming in mid-2016, with borrowing costs climbing to 1.5% by the end of 2017, my colleague Heather Stewart reports.

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
AUD	Employment Change (Jul)	38.5K	10.0K	7.0K
AUD	Unemployment Rate (Jul)	6.3%	6.0%	6.1%
EUR	German Factory Orders (MoM) (Jun)	2.0%	0.2%	-0.3%
GBP	Halifax House Price Index (YoY) (Jul)	7.9%	8.2%	9.6%
GBP	Industrial Production (MoM) (Jun)	-0.4%	0.1%	0.3%
GBP	Manufacturing Production (MoM)	0.2%	0.2%	-0.6%
GBP	BoE Inflation Report
GBP	BoE QE Total (Aug)	375B	375B	375B
GBP	Interest Rate Decision (Aug)	0.50%	0.50%	0.50%
GBP	BoE MPC Meeting Minutes

Upcoming Economic Events that you should be monitoring:

Friday, August 7, 2015

Cur.	Event	Actual	Forecast	Previous
JPY	BoJ Press Conference
USD	Nonfarm Payrolls (Jul)		223K	223K
USD	Unemployment Rate (Jul)		5.3%	5.3%
CAD	Employment Change (Jul)		5.0K	-6.4K
CAD	Ivey PMI (Jul)		52.0	55.9