GBP/USD Forecast Dec. 16, 2011, Fundamental Analysis
However, the pair showed some drop after U.K. retail sales fell in November from five-month high in October.
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After the bearish movements seen recently, on the back of the concerns from the euro area, investors decided to become long on risky assets today on expected rebound as a correction to the fall.
On the other hand, retail sales with auto fuel dropped 0.4%, compared with the revised 1.0 % in October, while the annual reading came at 0.7% compared with the revised 1.1%. The reading excluding auto fuel slipped 0.7%, in line the prior reading. On the annual basis, sales edged up 0.5% from the revised 1.1%.
The reading was affected by the rise in unemployment which damped consumer spending and amid worries the U.K. recession may relapse into another recession.
Moreover, data from the United States gave some positivity to the sentiment. Continuing claims for the week ended December 03, came in lower than expected at 3603 thousand compared to the prior revised estimate of 3599 thousand and median estimates of 3637 thousand.
Also, empire manufacturing index showed advance and current account deficit narrowed.
On Friday, the week ends with the release of no fundamentals from the U.K., while the U.S., at 13:30 GMT, will release CPI which is expected to linger at 3.5% in the year ending Nov., where the reading excluding food & energy is predicted to steady at 2.1%.
The data may have an impact on the pair’s movements, yet the pair may be more affected by the general sentiment which has been lately tracking the latest developments in the euro region.