GBP/USD Fundamental Forecast – September 6, 2016

The GBP/USD is flat with no data due in the UK today and the US on holiday. The pair is holding at 1.3295 near its highest level after positive data last week, but this week holds a great deal of data that could upset the currency. Prime Minister May is at the G20 where she is discussing negotiations with the Eurozone. It looks like May is going to move ahead with these negotiations on a rapid basis.

The British pound held relatively firm at $1.3293, having hit a one-month high of $1.3352 on Friday after a survey showed a downturn in Britain’s construction sector was easing.

Coming after surprisingly resilient reading in UK manufacturing survey, the data helped to boost expectations that the economy is holding up well after the shock Brexit vote in June.

A two-day summit of leaders from G20 nations that began on Sunday has so far produced little in the way of market-moving headlines while US President Barack Obama described his meeting with Chinese President Xi Jinping as “extremely productive”.

Analysts trimmed record high bets against the pound in the week ended Aug. 30 and traders expect a further boost to the pound as UK services sector purchasing managers’ index beats expectations. The index is forecast to bounce back to 50 in August from47.4 in July when the sector contracted in the aftermath of Britain’s vote to leave the European Union. Sterling was up 0.2 percent at $1.3313, not far from a peak of $1.3352 struck on Friday. That was sterling’s loftiest level since Aug. 3 and capped a third straight week of gains for the currency, its best run since April.

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Upcoming Economic Events that you should be monitoring:

 September 6, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction