GBP/USD Fundamental Analysis December 20, 2013 Forecast

Analysis and Recommendations:

The GBP/USD eased by 6 points against a very strong US dollar and mixed retail sales numbers from the UK today. Core retail sales beat expectations while year over year numbers missed slightly. The pound trimmed this week’s gains on Thursday after volatile overnight trading followed the U.S. Federal Reserve’s decision to cut bond-buying and the UK currency’s biggest daily rise in a month against the dollar. UK retail sales data came mostly in line with expectations, defying some market expectations for a strong number after a dive in jobless numbers on Wednesday which drove the pound higher against both the dollar and the euro.

On balance sterling was buoyed by the Federal Reserve’s pledge to keep interest rates low well into 2015 than it was hurt by the its decision to withdraw some of its extraordinary monetary stimulus. It rose to $1.6486 on Wednesday after the Fed’s decision before giving up some of those gains.

While trimming stimulus at its two-day meeting that ended yesterday, the Fed reinforced its assurance that interest-rate increases are far off by saying its benchmark rate is likely to stay low “well past the time that the unemployment rate declines below 6.5 percent.” The central bank has kept the target for the federal-funds rate at a range of zero to 0.25 percent since December 2008.

The U.S. currency has risen 4 percent this year, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The euro gained 8.4 percent, while the yen tumbled 15 percent.

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 December 19, 2013 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

Dec 20 16:30 Italy