Analysis and Recommendations: The GBP/USD dipped 19 points as the US dollar continued to rally. This week’s data should help the pound recover to trade
The GBP/USD dipped 19 points as the US dollar continued to rally. This week’s data should help the pound recover to trade above the 1.50 level. The pound is holding at 1.5010 against the stronger US dollar. The pound’s fortunes are likely to diverge next week, pulled higher by the European Central Bank and dragged lower by the Federal Reserve.
The U.K. currency has weakened against both the dollar and euro in the past week, as Bank of England Governor Mark Carney emphasized that eventual interest-rate increases will be gradual, while data confirmed the pace of economic growth in the nation slowed in the third quarter. In the next week, currency traders may be more likely to take their cues from elsewhere, as the ECB meets amid speculation it will boost stimulus.
The pound has dropped more than 4 percent against the dollar since the middle of 2015 amid concern that U.K. economic growth is slowing and will weigh on the prospects for higher interest rates. Forward contracts based on the sterling overnight index average, or Sonia, aren’t fully pricing in a BOE interest-rate increase until after January 2017.
Meanwhile, the probability the Fed will increase its benchmark by its Dec. 15-16 meeting is 74 percent, according to futures data compiled by Bloomberg. Fed Chair Janet Yellen is scheduled to testify to a congressional Joint Economic Committee on Dec. 3, and employment data due the next day will show further gains in the U.S. labor market, economists surveyed by Bloomberg forecast.
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 |
|||
NZD |
ANZ Business Confidence (Nov) |
14.6 |
15.0 |
10.5 |
|
||
AUD |
Company Gross Operating Profits |
1.3% |
1.0% |
-0.5% |
|||
AUD |
Private Sector Credit (MoM) (Oct) |
0.7% |
0.6% |
0.8% |
|
||
JPY |
BoJ Governor Kuroda Speaks |
|
|
|
|
||
EUR |
German Retail Sales (MoM) (Oct) |
-0.4% |
0.4% |
0.0% |
|
||
EUR |
German CPI (MoM) (Nov) |
|
0.1% |
0.0% |
Upcoming Economic Events that you should be monitoring:
Tuesday, December 1, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
AUD |
AIG Manufacturing Index (Nov) |
|
|
50.2 |
|
||
JPY |
Capital Spending (YoY) (Q3) |
|
|
5.6% |
|
||
AUD |
Building Approvals (MoM) (Oct) |
|
-2.3% |
2.2% |
|
||
AUD |
Current Account (Q3) |
|
-16.5B |
-19.0B |
|
||
CNY |
Manufacturing PMI (Nov) |
|
49.8 |
49.8 |
|
||
CNY |
Non-Manufacturing PMI (Nov) |
|
|
53.1 |
|
||
CNY |
Caixin Manufacturing PMI (Nov) |
|
48.3 |
48.3 |
|
||
AUD |
Interest Rate Decision (Dec) |
|
2.00% |
2.00% |
|
||
EUR |
German Manufacturing PMI (Nov) |
|
52.6 |
52.6 |
|
||
EUR |
German Unemployment Change |
|
-5K |
-5K |
|
||
EUR |
German Unemployment Rate (Nov) |
|
6.4% |
6.4% |
|
||
EUR |
Manufacturing PMI (Nov) |
|
52.8 |
52.8 |
|
||
GBP |
Manufacturing PMI (Nov) |
|
54.0 |
55.5 |
|
||
EUR |
Unemployment Rate (Oct) |
|
10.8% |
10.8% |
|
||
USD |
Manufacturing PMI (Nov) |
|
|
52.6 |
|
||
USD |
ISM Manufacturing Employment |
|
48.5 |
47.6 |
|
||
USD |
ISM Manufacturing PMI (Nov) |
|
50.4 |
50.1 |
|
Government Bond Auctions
Date Time Country
Dec 02 11:30 UK Gbp 3.75bn 1.5% Jan 2021 Gilt
Dec 02 16:30 Sweden Announces details of Bond on 11 Dec
Dec 03 10:30 Spain 1.15% Jul 2020 Bono
Dec 03 10:50 France
Dec 03 11:03 Sweden Sek 0.7bn 1%
Dec 07 13:00 Norway Details bond auction on 09 Dec
Dec 07 17:30 Italy Announces details of BTP/CCTeu on 11 Dec
Dec 08 11:30 UK 3.5% 2045 Gilt auction
Dec 08 19:00 US Holds 3-year note auction
Dec 09 11:03 Sweden Holds bond auction
Dec 09 11:05 Norway Holds bond auction
Dec 09 11:30 Germany Eur 3bn Dec 2017 Schatz
Dec 09 19:00 US Holds 10-year note auction
Dec 10 19:00 US Holds 30-year bond auction
Dec 11 11:10 Italy Auctions BTPs/CCTeus