GBP/USD Fundamental Analysis June 26, 2013 Forecast

Analysis and Recommendations:

The GBP/USD was the flat today, declining in the early morning but bouncing back after a surprise release of BBA mortgage approvals and Trades survey gave a bit of momentum to the pound which is trading at 1.5430. The GBP is up 0.1%, having had almost no reaction to higher home loans and CBI reported sales. Mark Carney takes over leadership of the BoE in one week, leaving today’s commentary in front of the Treasury Select Committee as Governor King’s last. He took the opportunity to highlight that globally low interest rates have caused unsustainably high asset prices but that he UK recovery remains too weak to be satisfactory.

While risk aversion continued to grip financial markets in the wake of the Federal Reserve’s tapering announcement last week, the FTSE 100 shrunk by 87 points and UK 10-year gilts fell to a 20-month low. Gilt prices move inversely to yield, meaning that as the yield on government debt goes up, the value of the bond goes down. The amount that the British government is required to pay in order borrows money for 10-years reached 2.54% yesterday afternoon – its highest level since October 2011.  This could make gilts more appealing to investors, it also carries the consequence of higher lending rates for British business and consumers, something which could prove very damaging to the government’s ambitions to help drive credit through to the real economy.

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 June 25, 2013 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

Jun 26 09:10 Italy

Jun 26 17:00 US

Jun 27 00:30 Japan

Jun 27 09:10 Italy

Jun 27 17:00 US