GBP/USD Weekly Fundamental Analysis, June 1 – 5, 2015 – Forecast

Weekly Analysis and Recommendation: 

The GBP/USD slipped an additional 30 points on Friday to trade at 1.5286 after the release of GDP figures.  The initial poor performance from the Pound was driven by a mildly disappointing set of Q1 Gross Domestic Product numbers which revealed that the UK economy had expanded by a lower than anticipated annualized 2.4% during the first three months of this year. Analysts had been expecting a showing of 2.5%, so Sterling lost ground across the board.

Sterling fell for a sixth straight day against the dollar on Friday, its worst run in nine months, erasing all gains made since national elections three weeks ago as investors worried about a possible “Brexit” from the European Union.

The pound had rallied after the center-right Conservatives unexpectedly triumphed in the May 7 vote with an overall majority. But since peaking at $1.5815 a week later, it has shed almost 4 percent as the Conservatives’ promised in-out referendum on EU membership has come into focus.

Prime Minister David Cameron’s government introduced a law in parliament on Thursday to guarantee the EU referendum will be held by the end of 2017. It also disclosed the question voters will be asked, making it “Yes” to stay in, “No” to leave.

Further dampening investor sentiment around the pound has been a run of weaker-than-expected data that has pushed expectations of when the Bank of England will start to raise interest rates further into next year.

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.

 Historical: From 2011 to Present

Highest: 1.6618 USD on Aug 19, 2011

Average: 1.5764 USD over this period

Lowest: 1.4832 USD on Mar 12, 2013

Major Economic Events for the week that you should be monitoring:

Upcoming Government Bond Auctions

Date Time Country 

Jun 02 11:30 UK Auctions 2% 2025 Conventional Gilt

Jun 03 11:03 Sweden Holds bond auction

Jun 03 11:30 Germany Eur 3bn Apr 2020

Jun 04 11:10 France Auctions OATs