GBP/USD Fundamental September 23, 2014 Forecast

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Updated: Aug 24, 2015, 20:00 GMT+00:00

Analysis and Recommendations: The GBP/USD gained 41 points to trade at 1.6326 as traders continue to party now that the Scottish election has decided that

GBP/USD Fundamental September 23, 2014 Forecast

Analysis and Recommendations:

The GBP/USD gained 41 points to trade at 1.6326 as traders continue to party now that the Scottish election has decided that the country will remain part of the Union for the next generation. The Bank of England said it will make no statement after Scottish voters decided to remain part of the UK, according to a spokesman. BoE Governor Mark Carney said before the vote that the bank had contingency plans in the event of a ‘yes’ vote. For several weeks, the referendum on Scottish independence jerked the British pound up and down on currency markets. Now that the Scots have opted to stay in the U.K., investors say sterling will dance to a different tune: one played by the Bank of England.

Sterling overnight interbank average rates are pricing in the chance of a first rate increase by the BoE in the spring of 2015. Analysts said sterling stood to gain more against the euro and yen since both the European Central Bank and the Bank of Japan are likely to stick with an ultra-loose monetary policy.

The U.S. Federal Reserve reiterated last week that, while near zero rates would be maintained for a considerable time, rate hikes could come at a faster rate next year and in 2016. The Fed nudged up its expected path of interest rate increases – or Fed dots – boosting yields on U.S. notes, and hence the appeal of the dollar.

And although the dollar gave back some of its gains on Monday; traders said the pound’s rebound against the greenback would be capped. They said uncertainty over future constitutional changes in the United Kingdom following the Scottish referendum could weigh on investment flows.

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 actual vs. forecast:

Cur.	Imp.	Event	Actual	Forecast	Previous
NZD		Consumer Sentiment	116.7		121.2
EUR		ECB President Draghi
USD		Existing Home Sales		1.0%	2.4%
USD		Existing Home Sales		5.20M	5.15M

Upcoming Economic Events that you should be monitoring:

Cur.		Event	Actual	Forecast	Previous
	Holiday	Japan – Autumn Equinox
EUR		French GDP (QoQ)		0.0%	0.0%
EUR		French Manufacturing		47.0	46.9
EUR		French Services PMI		50.2	50.3
EUR		German Manufacturing		51.2	51.4
EUR		German Services PMI		54.6	54.9
EUR		Manufacturing PMI		50.5	50.7
EUR		Services PMI		53.0	53.1
GBP		BBA Mortgage Approvals		42.9K	42.8K
CAD		Retail Sales (MoM)		0.4%	1.1%