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GBP/USD Monthly Fundamental Forecast December 2012

By:
Barry Norman
Updated: Aug 21, 2015, 00:00 UTC

Outlook and Recommendation The GBP/USD closed the month at 160.10 slightly up for the month. The British pound (GBP) is expected to continue retracing

GBP/USD Monthly Fundamental Forecast December 2012

GBP/USD Monthly Fundamental Forecast December 2012
GBP/USD Monthly Fundamental Forecast December 2012
Outlook and Recommendation

The GBP/USD closed the month at 160.10 slightly up for the month. The British pound (GBP) is expected to continue retracing losses sustained in 2008, supported by its triple-A rating, established fiscal plan and monetary policy, with the Bank of England likely to cease balance sheet expansion ahead of the Fed.

Highest: 1.6062

Lowest: 1.5962

Difference: 0.0100

Average: 1.6023

Change %: -0.14

Investor sentiment is increasingly bullish GBP. As of the end of November, CFTC traders held a US$1 billion net long position, while risk reversals suggest that the options market was positioned for GBP upside. Traders expect the GBP to appreciate in 2013, drive by investor inflows, a BoE that proves less aggressive than the Fed and improving data; however, on December 5th the Treasury will release the autumn budget, which will be a key determinant of the UK’s credit outlook. If the sovereign debt rating comes under threat, the GBP is likely to follow.

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.

Central Bank – The Bank of England

Date of next meeting or last meeting: December 6, 2012

Current Rate: 0.50%

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

 Dec. 03

08:15

CHF

Retail Sales (YoY) 

4.1%

5.4%

 

08:30

CHF

SVME PMI 

47.0

46.1

 

15:00

USD

ISM Manufacturing Index 

51.3

51.7

Dec. 05

10:00

EUR

Retail Sales (MoM) 

-0.1%

-0.2%

 

13:15

USD

ADP Nonfarm Employment Change 

125K

158K

 

13:30

USD

Nonfarm Productivity (QoQ) 

2.7%

1.9%

 

13:30

USD

Unit Labor Costs (QoQ) 

-0.9%

-0.1%

 

15:00

USD

ISM Non-Manufacturing Index 

53.5

54.2

Dec. 06 

08:15

CHF

CPI (MoM) 

 

0.1%

 

09:30

GBP

Trade Balance 

-8.8B

-8.4B

 

10:00

EUR

GDP (QoQ) 

-0.1%

-0.1%

 

11:00

EUR

German Factory Orders (MoM) 

0.9%

-3.3%

 

12:00

GBP

Interest Rate Decision 

0.50%

0.50%

 

12:00

GBP

BOE QE Total 

375B

375B

 

12:45

EUR

Interest Rate Decision 

0.75%

0.75%

Dec. 07

09:30

GBP

Industrial Production (MoM) 

0.7%

-1.7%

 

09:30

GBP

Manufacturing Production (MoM) 

-0.2%

0.1%

 

09:30

GBP

Industrial Production (YoY) 

-0.6%

-2.6%

 

11:00

EUR

German Industrial Production (MoM) 

-0.5%

-1.8%

 

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