GBP/USD Monthly Fundamental Forecast July 2013

GBP/USD Monthly Fundamental Forecast July 2013
GBP/USD Monthly Fundamental Forecast July 2013
Outlook and Recommendation

The GBP/USD ended at 1.5204 off the monthly high of 1.5752. Economic prospects have brightened somewhat in the UK; a slew of better-than-expected data over the last month indicates that the yearly growth pace picked up smartly in the second quarter. Of note, the May labor market report was quite upbeat – both with respect to employment and wages – which bodes better than feared for household incomes and spending, and has already been reflected in strong retail sales figures for the. Also exceeding expectations were the May purchasing managers’ indexes (especially for services), housing loan data and April trade figures. Accordingly, traders have raised our 2013 GDP forecast slightly from 0.6% to 0.8%

Highest: 1.5752

Lowest: 1.5008

Difference: 0.0744

Average: 1.5455

Change %: 0.49

With Mark Carney taking over the BoE on July 1st, traders are expecting some changes. The June meeting of the Bank of England marked the end of Mervyn King’s tenure as governor, with Mark Carney set to take up the post on July 1st. King’s final days left the door open to further quantitative easing – he stressed at his last appearance before the Treasury Select Committee that the economy, and thus interest rates, are still far from returning to normal conditions. After touching above 1.57 in USD terms around mid-month, the GBP has come down to the level where it started June. The currency will remain sensitive to shifts in monetary policy expectations.

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.

Central Bank Name – The Bank of England

Date of next meeting or last meeting: July 04, 2013

Current Rate: 0.50%

GBPUSD 629M

GMT                                   Event                                                                                Consensus       Previous  

MONDAY, JUL 01

09:00     EMU      EUR       Consumer Price Index – Core                                                     1.2%                    

09:00     EMU      EUR       Consumer Price Index (YoY) (Jun)                               1.5%      1.4%     

THURSDAY, JUL 04

11:00     UK          GBP        BoE Interest Rate Decision (Jul 4)                                             0.5%      0.5%     

11:00     UK          GBP        BoE Asset Purchase Facility (Jul)                                                £375B    £375B   

11:45     EMU      EUR       ECB Interest Rate Decision (Jul 4)                                             0.5%      0.5%     

12:30     EMU      EUR       ECB Monetary policy statement and press conference                                    

FRIDAY, JUL 05

12:30     US          USD       Nonfarm Payrolls (Jun)                                                                170K      175K     

12:30     US          USD       Unemployment Rate (Jun)                                                          7.5%      7.6%     

WEDNESDAY, JUL 10

06:00     DE          EUR       Consumer Price Index (YoY) (Jun)                                              1.5%     

06:00     DE          EUR       Harmonized Index of Consumer Prices                                                   1.6%                    

18:00     US          USD       FOMC Minutes                                                                             

FRIDAY, JUL 12

07:30     CH          CHF        SNB Interest Rate Decision                                                                       0%         

SATURDAY, JUL 13

12:30     US          USD       Retail Sales (MoM) (Jun)                                                             0.6%     

TUESDAY, JUL 16

08:30     UK          GBP        Consumer Price Index (YoY) (Jun)                                              2.7%     

08:30     UK          GBP        Core Consumer Price Index (YoY) (Jun)                                                   2.2%     

09:00     EMU      EUR       Consumer Price Index – Core (YoY) (Jun)                                                1.2%     

09:00     EMU      EUR       Consumer Price Index (YoY) (Jun)                                              1.4%     

12:30     US          USD       Consumer Price Index (YoY) (Jun)                                              1.4%     

12:30     US          USD       Consumer Price Index Ex Food & Energy                                                1.7%     

WEDNESDAY, JUL 17

08:30     UK          GBP        Bank of England Minutes                                                                                         

08:30     UK          GBP        Claimant Count Change (Jun)                                                                    -8.6K     

THURSDAY, JUL 25

08:30     UK          GBP        Gross Domestic Product (QoQ) (Q2)                                                        0.3%     

08:30     UK          GBP        Gross Domestic Product (YoY) (Q2)                                                         0.3%     

WEDNESDAY, JUL 31

07:55     DE          EUR       Unemployment Change (Jul)                                                                     -12K      

07:55     DE          EUR       Unemployment Rate s.a. (Jul)                                                                   6.8%     

12:30     US          USD       Gross Domestic Product Annualized (Q2)                                2.4%     

18:00     US          USD       Fed Interest Rate Decision                                                                        0.25%   

18:00     US          USD       Fed’s Monetary Policy Statement and press conference                                  

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