GBP/USD Forecast Jan. 23, 2012, Fundamental Analysis

GBP/USD Forecast Jan. 23, 2012, Fundamental Analysis
GBP/USD Forecast Jan. 23, 2012, Fundamental Analysis
On Monday, both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

In the week ended January 20, the GBP/USD showed advance as the improvement in the sentiment after successful bond selling, which saw strong demand and drop in borrowing cost, by many euro area economies and progress inU.S.data gave the supremacy to high-yielding currencies.

This week, the main focus will be on growth data from both economies as investors will be eager to see the effect of the global slowdown the escalating European debt crisis on both economies in the fourth quarter.

However, more focus may be given to the latest developments in the euro area as EU finance chiefs meet inBrusselsand policy makers and business leaders meet in Davos, while euro area, including Germany, France, Spain and Italy, prepare to sell debt.

Still, the general sentiment in the market is more affected by the latest developments in the euro area amid chief concerns the lingering European debt crisis would push global economies into another recession.

Last week, the World Bank lowered global growth forecasts to 2.5% this year compared with 3.6% announced in June, where it said the euro area expected contraction of 0.3% will impact the growth pace in emerging markets.

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