GBP/USD Fundamental Forecast – September 9, 2016

The GBP/USD added 30 points to 1.3370 and continues its post Brexit rally hitting its highest level in the referendum. Weakness in the US dollar has helped the pound gain as well as positive economic data. Bank of England Governor Mark Carney said he was “absolutely serene” about the way the central bank warned of a possible Brexit hit to Britain’s economy, before voters decided in June to leave the European Union.

“I am absolutely serene about the … judgments made both by the MPC and the FPC,” Carney told lawmakers, referring to the Bank’s monetary and financial policy committees. Carney came under criticism from supporters of Brexit in the run-up to the referendum, and after it, for saying the economy would face a material slowdown, and possibly a recession, in the event of an “Out” vote. Data has suggested Britain’s economy did not suffer the kind of devastating post-Brexit vote hit forecast by some supporters of the Remain campaign, but economists say it is heading for a slowdown. Carney fended off criticism from some lawmakers that the Bank moved too aggressively to help Britain’s economy through the Brexit vote shock in early August when it cut interest rates, expanded its bond-buying program and took other measures to ease lending. “I absolutely feel comfortable with the decision I supported and the committee took in August to supply monetary policy stimulus,” he said. Carney said the Bank had expected the main sectors of Britain’s economy to bounce back after the initial impact of the referendum in July, as shown in a series of purchasing managers indexes published in recent days.

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Upcoming Economic Events that you should be monitoring:

 September 9, 2016

Government Bond Auctions

Date Time Country Auction

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction