GBP/USD Fundamental Analysis March 20, 2014 Forecast

The GBP/USD added 48 points to trade at 1.6640  after UK claimant count printed better than expected with unemployment remaining at 7.2% but claims fell. The Bank of England minutes were released with no surprises. Sterling struggled against the majors yesterday as traders had little fresh economic stimulus to go on. The little scraps they were fed came in the form of a shake-up at the Bank of England. In a reshuffle aimed at reforming both the structure and culture of the Bank, Governor Mark Carney announced that Spencer Dale and Paul Fisher would be leaving the Monetary Policy Committee.

It is difficult to tell what impact the BoE rejigging will have on the Pound because Haldane is seen to have an independent outlook, whilst Shafik’s views are, as of yet, unknown. With regards to the leavers: the MPC has lost one dove in Fisher and one hawk in Dale

Sterling slid by just under a cent yesterday to reach a monthly low against the US Dollar, as US Building Permits rose above 1 million during February. The 7.7% acceleration in Building Permits is encouraging for the American economy because: 1) it is considered to be the leading indicator of housing market activity, and 2) it was the second best monthly performance since the recession in 2009.

Disappointingly, the US Consumer Price Index decelerated from 1.6% to 1.1% during February. However, the weaker-than-expected inflation report had little impact on GBP/USD.

Investment managers expect the UK’s rapid recovery to drive up the pound for the first six months of 2014, according to a survey by Capital Spreads, published today. Just four per cent of the 200 fund managers surveyed expect the economy to weaken at all, while 83.5 per cent are confident growth will continue over the next 12 months. As a result 56 per cent of the City investors expect the pound to outperform the euro, US dollar and Swiss franc over the first half of the year.

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 March 19, 2014 actual v. forecast

 

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

Upcoming Government Bond Auctions

Date Time Country 

Mar 20 09:30 Spain

Mar 20 10:03 Sweden

Mar 20 15:00 US

Mar 20 17:00 US

Mar 21 16:30 Italy