GBP/USD Weekly Fundamental May 13 – 17, 2013 Forecast

Weekly Analysis and Recommendation:

The GBP/USD slipped most of the week to close at 1.5365 after hitting a high of 1.5598. The Bank of England held rates and policy as expected. Sterling threatened the bullish trend dating back to March as the GBPUSD tumbled to a fresh monthly low of 1.5313, but the selloff may be short-lived should the Bank of England strike an improved outlook for the U.K. Indeed, the BoE’s inflation report highlights the biggest event risk for the following week, and the quarterly update may dampen bets for more quantitative easing as the central bank sees a slow but sustainable recovery in Britain. 

As the U.K. economy skirts a triple-dip recession, the BoE may show a greater willingness to address the stickiness in price growth, and the central bank remains poised to operate under its inflation-targeting framework as the recovery slowly gathers pace. We may see a growing number of central bank officials make an attempt to talk up the credibility of the BoE as inflation has held above the 2% target since December 2009, and the Monetary Policy Committee may adopt a more neutral to hawkish tone for monetary policy as the fundamental developments coming out of the U.K. raises the prospects for future growth.

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 May 6 – 10 actual v. forecast for Euro, GPB, the Franc, and USD

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