GBP/USD Monthly Fundamental Forecast – April 2016

The GBP/USD had a rocky month falling to multi year lows before recovering to end at 1.4392 witnessing a gain of 3.18% on weakness in the US dollar. GDP for Q4 printed higher than expected but Brexit fears hit a frenzy this month.  As ‘Brexit’ worries are expected to remain a significant drag on the UK economy ahead of the June referendum, however, this stronger growth could well have fizzled out in the first quarter of 2016, reducing the impact of the figure. Ahead of the weekend the Pound could post some gains if March’s Manufacturing PMI demonstrates greater sector expansion, which could offer some much needed reassurance in the strength of the UK’s manufacturing industry at this troubled juncture.

The US Dollar has remained in a slump in the wake of Fed Chair Janet Yellen’s more dovish commentary on monetary policy, with investors generally disappointed to see the odds of an April interest rate hike retreat. Nevertheless, this would seem to bode well for Friday’s Non-Farm Payrolls report, with stronger jobs growth likely to bolster the dollar.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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