GBP/USD Monthly Fundamental Forecast January 2013

Outlook and Recommendation

The GBP/USD went for a roller coaster ride this month ending at 1.6173. The pair traded as high as 1.6306 after strong eco data printed a higher than expected GDP and jobs numbers. But the controlling factor this month was the US dollar and negotiations in Washington to avoid the fiscal cliff.

The US dollar gained and tumbled on political antics, changing sentiment from hour to hour. Market sentiment remained under pressure as investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.  U.S. President Barack Obama met with congressional leaders at the White House Friday afternoon, but both sides failed to reach an agreement ahead of the looming year-end deadline. The gathering included House Speaker John Boehner and Senate Minority Leader Mitch McConnell, both Republicans, as well as Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats. 
The House of Representatives is due to return to Washington on Sunday. The Senate will be in Sunday as well to try to reach a last-ditch agreement. 

Without a deal, the U.S. could fall back into recession and drag much of the world down with it. 

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 Name – The Bank of England

Date of next meeting or last meeting: January 10, 2013

Current Rate: 0.50%

Economic events for the month of January affecting EUR, CHF, GBP and USD