GBP/USD Weekly Fundamental Analysis April 9-13, 2012, Forecast

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Updated: Jan 1, 2011, 00:00 GMT+00:00

Introduction: While the ranges are wider (and so should stops be), the lines are rather distinctive, especially towards the borders of the long term wide

GBP/USD Weekly Fundamental Analysis April 9-13, 2012, Forecast

Introduction: While the ranges are wider (and so should stops be), the lines are rather distinctive, especially towards the borders of the long term wide range. This pair makes for good trades, with the new austerity program implemented in the UK, the GBP is moving more on Fundamentals now.

The interest rate differential between the Bank of England (BoE) and the Federal Reserve
High yield and attractive growth in the UK drives GBP/USD higher

Analysis and Recommendation:

The GBP/USD passed and held above the 1.60 level for two days, but could not sustain against the strength of the USD after the release of the FOMC minutes on Tuesday. The greenback surged against all of its partners.

Strong data from the US flowed all week, until a disappointing NFP report after the markets had closed for the holiday weekend. The UK is also closed on Easter Monday.

The sterling had several strong reports over the past week but they were mixed with several negatives also, PMI and Service PMI and Housing were over forecast. The BoE maintained interest rates. It was just a mixed bag

Whereas the euro began to tumble mid week on continued worries about Spain and Italy, overshadowed the EU Finance Ministers approval of the new firewall limits.

Disappointing economic data flowed all week. Spain introduced a tough new budget, which incorporated all the austerity measures demanded by the EU, but in reality would be difficult or impossible to implement.

Greece continued in the headlines, as worried about the necessity of a 3^rd bailout became news.

04/06/2012	1.5858	1.5829	1.5866	1.5825	0.18%
04/05/2012	1.5829	1.5903	1.5909	1.5805	-0.47%
04/04/2012	1.5903	1.5903	1.5911	1.5834	0.00%
04/03/2012	1.5905	1.6036	1.6046	1.5892	-0.82%
04/02/2012	1.6036	1.6012	1.6062	1.5980	0.15%
04/01/2012	1.6012	1.6025	1.6028	1.6007	-0.08%

Historical:

Highest: 1.681 USD on 17 Nov 2009.

Average: 1.5807 USD over this period

Economic Data from Europe for the week of April 2-6, 2012 actual v. forecast

CHF

Retail Sales (YoY)

0.8%

3.2%

4.7%

CHF

SVME PMI

51.1

49.5

49.0

EUR

French Manufacturing PMI

46.7

47.6

EUR

German Manufacturing PMI

48.4

48.1

EUR

Manufacturing PMI

47.7

47.7

GBP

Manufacturing PMI

52.1

50.5

51.5

EUR

Unemployment Rate

10.8%

10.8%

10.7%

EUR

GDP (QoQ)

-0.3%

-0.3%

Apr. 04

GBP

Halifax House Price Index (MoM)

2.2%

-0.3%

-0.4%

GBP

Services PMI

55.3

53.5

53.8

EUR

Retail Sales (MoM)

-0.1%

0.1%

1.1%

EUR

German Factory Orders (MoM)

0.3%

1.2%

-1.8%

EUR

Interest Rate Decision

1.00%

1.00%

EUR

ECB Press Conference

Apr. 05

CHF

CPI (MoM)

0.6%

0.4%

0.3%

EUR

Dutch CPI (YoY)

2.50%

2.20%

2.50%

GBP

Industrial Production (MoM)

0.4%

0.3%

-0.6%

GBP

Manufacturing Production (MoM)

-1.0%

0.1%

-0.3%

GBP

Interest Rate Decision

0.50%

0.50%

GBP

BOE QE Total

325B

325B

GBP

NIESR GDP Estimate

0.1%

0.0%

Economic Reports from the USA for the week of April 2-6, 2012 actual v. forecast

Apr. 02

USD

ISM Manufacturing Index

53.4

53.0

52.4

Apr. 03

USD

FOMC Meeting Minutes

Apr. 04

USD

ADP Nonfarm Employment Change

209K

200K

230K

Apr. 05

USD

Initial Jobless Claims

357K

355K

363K

Apr. 06

USD

Nonfarm Payrolls

120K

203K

240K

USD

Unemployment Rate

8.2%

8.3%

Economic Events

Economic Highlights of the coming week for the USA (only minor reports, a very light week)

Apr. 9