GBP/USD Fundamental Forecast – May 27, 2016

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Published: May 26, 2016, 10:35 UTC

The GBP/USD gave back some of its US dollar inspired gains to trade at 1.4704 holding on to a few points after housing and mortgage data disappointed

GBP/USD Fundamental Forecast – May 27, 2016

The GBP/USD gave back some of its US dollar inspired gains to trade at 1.4704 holding on to a few points after housing and mortgage data disappointed today. UK GDP missed expectations today along with mortgage approval but had very little effect on the pound as traders remain more focused on the June 23^rd referendum. UK growth slowed to 0.4% in the first quarter of 2016, down from 0.6%, the Office for National Statistics reports. That’s in line with the first estimate, released last month. But the annual growth rate has been revised down to 2%, from 2.1% initially.

Business investment fell by 0.5% during the quarter, driven by “falls in non-residential building”, the ONS says. That may show that companies are more cautious about economic prospects and have been cutting back. That could be due to the recent turmoil in the financial markets, or the EU referendum.

However, gross fixed capital formation growth (another measure of corporate investment) did rise by 0.5% in January-March after shrinking in the previous three months.

The figures also show deterioration in Britain’s trade with the rest of the world.

Britain’s EU referendum is just four weeks away, and traders are getting nervous. The cost of hedging against wild swings in the value of the pound over the next month has jumped this morning. It hit its highest level since March 2009, in the aftermath of the financial crisis.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Upcoming Economic Events that you should be monitoring:

Friday, May 27, 2016

Cur.	Event	Actual	Forecast	Previous
AUD	RBA Assist Gov Debelle Speaks
JPY	National Core CPI (YoY) (Apr)		-0.4%	-0.3%
JPY	Tokyo Core CPI (YoY) (May)		-0.4%	-0.3%
USD	GDP (QoQ) (Q1)		0.9%	0.5%
USD	GDP Price Index (QoQ) (Q1)		0.7%	0.7%
USD	Michigan Consumer Expectations		86.6	87.5
USD	Michigan Consumer Sentiment (May)		95.4	95.8
USD	Fed Chair Yellen Speaks
USD	Baker Hughes U.S. Rig Count			318