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GBP/USD Fundamental Analysis – November 25, 2015 – Forecast

By:
Barry Norman
Published: Nov 24, 2015, 12:44 UTC

Analysis and Recommendations: The GBP/USD dipped 15 points ahead of the autumn statement from the government. The US dollar weakened a bit but remains

GBP/USD Fundamental Analysis – November 25, 2015 – Forecast

gbpusd tuesday bns
Analysis and Recommendations:

The GBP/USD dipped 15 points ahead of the autumn statement from the government. The US dollar weakened a bit but remains near the top of its trading range. The pound is trading at 1.5109.  The pound is down from last week’s close. No event risk today leaving the sterling to trade on broader movements. Main event this week will come when Bank of England Governor Mark Carney will present the inflation report this morning. This event risk will be interesting to the market because the recent fundamentals that release were sluggish.

The attention will be on Bank of England Governor Mark Carney who is expected to testify to lawmakers later in the day. Earlier this month, he cooled expectations that the BoE will follow the Federal Reserve soon in raising rates, and he is expected to reiterate that, flagging external risks to growth.

The dollar index was down 0.15 percent at 99.63, having hit a 8-month high of 100.00 struck on Monday. Volumes are likely to stay low given the Thanksgiving holidays in the United States.

Sterling’s fall could be attributed to a robust dollar, as per BNP Paribas currency strategist Sam Lynton-Brown and over the medium term the bank’s confidence in the sterling remained unwavering, he said as per the report.

“We think the market is underpricing the likely timing and pace of Bank of England hikes. The market only prices the first BoE hike by Q1 2017. Our economist still thinks they go in May,” he stated as mentioned in the report.

Market bets have been shoved out to the end of 2016 depending upon the time of the next move on policy by BoE, which is mostly anticipated to be to result in an interest rate hike.

Expectations that the Britain could vote to leave the European Union next year persist in the market which has augmented the risk of volatility closer to the vote, and the referendum could also infuse complications in the time of the rate hike, as stated by asset managers in a Reuter’s summit.

The chancellor George Osborne will stand in the House of Commons to deliver the third package of fiscal policy measures this year.

The majority of attention is focused on cuts to spending and how this is balanced with demands for greater funding in some critical areas – as well as pledges to soften savings in others.

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

 

  EUR

 

German GDP (QoQ) (Q3)

0.3%

0.3%

0.3%

 

 

  EUR

 

German GDP (YoY) (Q3)

 1.8%

1.8%

1.8%

 

 

  EUR

 

ECB’s Costa Speaks  

 

 

 

 

 

  EUR

 

German Business Expectations (Nov)

 104.7

104.0

103.8

 

 

  EUR

 

German Current Assessment (Nov)

 113.4

112.4

112.6

 

 

  EUR

 

German Ifo Business Climate Index

 109.0

108.2

108.2

 

 

  AUD

 

RBA Governor Stevens Speaks  

 

 

 

 

 

  USD

 

GDP (QoQ) (Q3)  

 

2.1%

1.5%

 

 

  USD

 

GDP Price Index (QoQ) (Q3)  

 

1.2%

1.2%

 

 

  USD

 

Goods Trade Balance (Oct)

 

-61.80B

-58.63B

 

 

  USD

 

S&P/CS HPI Composite – 20 n.s.a. (YoY)

 

5.1%

5.1%

 

 

  USD

 

CB Consumer Confidence (Nov)

 

99.5

97.6

   

 

gbpusd

Upcoming Economic Events that you should be monitoring:

Tuesday, November 25, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  USD

 

API Weekly Crude Oil Stock

 

 

-0.482M

 

 

  JPY

 

Monetary Policy Meeting Minutes

 

 

 

 

 

  AUD

 

Construction Work Done (QoQ) (Q3)

 

-2.1%

1.6%

 

 

  GBP

 

BBA Mortgage Approvals

 

45.5K

44.5K

 

 

  AUD

 

RBA Assist Gov. Debelle Speaks 

 

 

 

 

 

  USD

 

Core Durable Goods Orders (MoM)

 

0.3%

-0.3%

 

 

  USD

 

Durable Goods Orders (MoM) (Oct)

 

1.5%

-1.2%

 

 

  USD

 

Initial Jobless Claims

 

270K

271K

 

 

  USD

 

Personal Spending (MoM) (Oct)

 

0.3%

0.1%

 

 

  USD

 

Services PMI (Nov)  

 

55.0

54.8

 

 

  USD

 

Michigan Consumer Sentiment (Nov)

 

93.1

93.1

 

 

  USD

 

New Home Sales (Oct)

 

500K

468K

 

 

  USD

 

Crude Oil Inventories

 

 

0.252M

 

 

  USD

 

Baker Hughes U.S. Rig Count

 

 

564

   

Government Bond Auctions

Date Time Country

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 11:00 Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 19:00 US 13bn 5-year note

Nov 25 11:03 Sweden Sek 4bn 1% Nov 2026 bond

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 17:30 US Usd 35bn 2-year FRN

Nov 25 19:00 US Usd 29bn 7-year note

Nov 26 11:03 Sweden Sek 5bn 1% Nov 2026 bond exchange

Nov 27 11:03 Sweden 1.5% Nov 2023 bond exchange, 1% Nov 2026 bond exchange

Nov 27 11:10 Italy Auctions BTPs

Nov 27 N/A Spain Announces details of 03 Dec

Nov 30 11:03 Sweden Holds bond auction

Dec 01 11:30 UK 1.5% 2021 Gilt auction

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain Auctions

Dec 03 10:50 France Auctions OATs

Dec 03 11:03 Sweden Holds I/L bond auction

Dec 04 11:03 Sweden Holds I/L bond auction

 

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