GBP/USD Weekly Fundamental Analysis December 17-21, 2012, Forecast

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Updated: Aug 21, 2015, 01:00 UTC

Weekly Analysis and Recommendation: The GBP/USD climbed against a weakened US dollar. There was little supportive data for the GBP this week, after

GBP/USD Weekly Fundamental Analysis December 17-21, 2012, Forecast

Weekly Analysis and Recommendation:

The GBP/USD climbed against a weakened US dollar. There was little supportive data for the GBP this week, after Chancellor Osborne’s Autumn statement and a downward revision to GDP outlook for 2013. The Bank of England held policy and rates last week. , the BoE has already been pursuing a flexible inflation target in recent years. The subtle difference is that under Mervyn King’s leadership this has been done on a backward- looking basis. In other words, the Bank has recognized that inflation has been too high. However, it has ex-post justified this by saying ‘even with the benefit of hindsight, we wouldn’t/shouldn’t have done anything differently because it would have destroyed the economy’. Furthermore, while the Bank’s target has remained headline inflation, it has really been targeting core inflation excluding indirect taxes. It has looked through temporary non-core additions to inflation from the likes of energy prices and movements in VAT.

Date	Last	Open	High	Low	Change %
Dec 14, 2012	1.6171	1.6113	1.6178	1.6104	0.35%
Dec 13, 2012	1.6114	1.6136	1.6152	1.6086	-0.13%
Dec 12, 2012	1.6135	1.6118	1.6172	1.6095	0.11%
Dec 11, 2012	1.6118	1.6072	1.6122	1.6069	0.29%
Dec 10, 2012	1.6072	1.6035	1.6097	1.6014	0.23%

The US dollar was weakened by the US central bank injecting additional stimulus to help keep the US economy on its recovery and tied additional stimulus to inflation and unemployment rates. The pair traded on Friday at 1.6171 tipped to continue to climb this week.

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.

Major Economic Events for the week of December 10-14 actual v. forecast for Euro, GPB, the Franc, and USD

Date	Currency	Event	Actual	Forecast	Previous
Dec. 10	CNY	Chinese Trade Balance	19.60B	25.70B	32.00B
Dec. 11	GBP	RICS House Price Balance	-9%	-7%	-7%
	EUR	French Non-Farm Payrolls (QoQ)	-0.3%	-0.3%	-0.3%
	EUR	German ZEW Economic Sentiment	6.9	-12.0	-15.7
	EUR	ZEW Economic Sentiment	7.6	0.1	-2.6
	USD	Trade Balance	-42.2B	-42.6B	-40.3B
Dec. 12	EUR	German CPI (MoM)	-0.1%	-0.1%	-0.1%
	EUR	German CPI (YoY)	1.9%	1.9%	1.9%
	EUR	French CPI (MoM)	-0.2%	0.0%	0.1%
	GBP	Average Earnings Index +Bonus	1.8%	1.9%	1.8%
	GBP	Claimant Count Change	-3.0K	7.0K	6.0K
	EUR	Industrial Production (MoM)	-1.4%	0.2%	-2.3%
	USD	Import Price Index (MoM)	-0.9%	-0.5%	0.3%
	USD	10-Year Note Auction	1.652%		1.675%
	USD	Interest Rate Decision	0.25%	0.25%	0.25%
	USD	Federal Budget Balance	-172.1B	-150.0B	-120.0B
Dec. 13	CHF	PPI (MoM)	0.0%	-0.3%	-0.1%
	CHF	Interest Rate Decision	0.00%	0.00%	0.00%
	GBP	CBI Industrial Trends Orders	-12	-16	-21
	USD	Core PPI (MoM)	0.1%	0.2%	-0.2%
	USD	Core Retail Sales (MoM)	0.0%	-0.1%	0.0%
	USD	PPI (MoM)	-0.8%	-0.5%	-0.2%
	USD	Retail Sales (MoM)	0.3%	0.5%	-0.3%
	USD	Initial Jobless Claims	343K	370K	372K
	USD	Continuing Jobless Claims	3198K	3210K	3221K
	USD	PPI (YoY)	1.5%	1.8%	2.3%
	USD	Core PPI (YoY)	2.2%	2.2%	2.1%
Dec. 14	CNY	Chinese HSBC Manufacturing PMI	50.90		50.50
	EUR	French Manufacturing PMI	44.6	45.0	44.5
	EUR	German Manufacturing PMI	46.3	47.2	46.8
	EUR	Manufacturing PMI	46.3	46.6	46.2
	EUR	CPI (YoY)	2.2%	2.2%	2.2%
	EUR	Employment Change (QoQ)	-0.2%	0.0%	0.0%
	EUR	Core CPI (YoY)	1.4%	1.5%	1.5%
	USD	Core CPI (MoM)	0.1%	0.2%	0.2%
	USD	CPI (MoM)	-0.3%	-0.2%	0.1%
	USD	CPI (YoY)	1.8%	1.9%	2.2%
	USD	Core CPI (YoY)	1.9%	2.0%	2.0%
	USD	Industrial Production (MoM)	1.1%	0.3%	-0.7%
	ARS	Argentinian CPI (MoM)	0.9%	0.7%	0.8%

Historical: From 2010 to Present

Highest: 1.6747 USD on April 28, 2011.

Average: 1.5751 USD over this period

Lowest: 1.4229 USD on May 20, 2010

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

Date	Time	Currency	Event	Forecast	Previous
Dec. 17	13:30	USD	NY Empire State Manufacturing Index	-1.0	-5.2
	14:00	USD	TIC Net Long-Term Transactions		3.3B
Dec. 18	09:30	GBP	CPI (YoY)	2.6%	2.7%
	09:30	GBP	PPI Input (MoM)	-0.1%	0.4%
	09:30	GBP	CPI (MoM)	0.2%	0.5%
	09:30	GBP	PPI Input (YoY)	-0.5%	0.1%
	13:30	USD	Current Account	-103.5B	-117.4B
Dec. 19	09:00	EUR	German Ifo Business Climate Index	102.0	101.4
	09:00	EUR	German Current Assessment	108.0	108.1
	09:00	EUR	German Business Expectations	96.3	95.2
	11:00	GBP	CBI Distributive Trades Survey	25	33
	13:30	USD	Building Permits	0.875M	0.868M
	13:30	USD	Housing Starts	0.870M	0.894M
Dec. 20	09:30	GBP	Retail Sales (MoM)	0.3%	-0.8%
	09:30	GBP	Retail Sales (YoY)	1.5%	0.6%
Dec. 21	07:00	EUR	GfK German Consumer Climate	5.9	5.9
	09:30	GBP	Current Account	-14.0B	-20.8B
	09:30	GBP	GDP (QoQ)	1.0%	1.0%
	09:30	GBP	GDP (YoY)	-0.1%	-0.1%