GBP/USD Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, Forecast
Weekly Analysis and Recommendation:
The GBP/USD opened the holiday week at 1.6151 and closed the week at 1.6162. There was no news for the GBP this week with only low level eco data as many traders remained sidelined due to the holidays as well as uncertainty in the US. The pound moved in sympathy to the euro most of the week and on the strength and the weakness of the US dollar.
Your capital is at risk
For much of 2012, investors seeking to flee the euro zone debt crisis headed for the perceived safety of UK gilts, which are liquid and triple-A rated. But high inflation can erode the value of an asset, making the investment a bit unattractive. Britain is also struggling to meet its own targets on reducing a high debt burden thanks to poor growth. UK data last week revealed a rise in public borrowing, and there are worries its own rating could come under threat next year. Retail sales were sluggish while consumer confidence fell sharply in December, adding to concerns the economy could deteriorate in the coming months and push the Bank of England to ease monetary policy more. Those factors are likely to weigh on sterling in the near term.
Date |
Last |
Open |
High |
Low |
Change % |
Dec 28, 2012 |
1.6162 |
1.6115 |
1.6171 |
1.6079 |
0.29% |
Dec 27, 2012 |
1.6115 |
1.6125 |
1.6202 |
1.6067 |
-0.06% |
Dec 26, 2012 |
1.6125 |
1.6136 |
1.6172 |
1.6108 |
-0.07% |
Dec 25, 2012 |
1.6136 |
1.6120 |
1.6138 |
1.6120 |
0.10% |
Dec 24, 2012 |
1.6120 |
1.6151 |
1.6206 |
1.6102 |
-0.19% |
Expectations that Congress will fail to reach a deal before Jan. 1 to avert the “fiscal cliff” of $600 billion of spending cuts and tax hikes are likely to buoy safe-haven flows into the more liquid US dollar in the near term.
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 December 24 -28 actual v. forecast for Euro, GPB, the Franc, and USD
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
Dec. 27 |
GBP |
BBA Mortgage Approvals |
33.6K |
34.6K |
33.1K |
|
USD |
Initial Jobless Claims |
350K |
360K |
362K |
|
USD |
Continuing Jobless Claims |
3206K |
3200K |
3238K |
|
USD |
CB Consumer Confidence |
65.1 |
70.0 |
71.5 |
|
USD |
New Home Sales |
377K |
378K |
361K |
Dec. 28 |
EUR |
French Consumer Spending (MoM) |
0.2% |
0.1% |
-0.1% |
|
EUR |
French GDP (QoQ) |
0.1% |
0.2% |
0.2% |
|
EUR |
Italian 10-Year BTP Auction |
4.48% |
4.45% |
|
|
USD |
Chicago PMI |
51.6 |
51.0 |
50.4 |
|
USD |
Pending Home Sales (MoM) |
1.7% |
1.0% |
5.0% |
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
Date |
Time |
Currency |
Event |
Forecast |
Previous |
Jan. 01 |
01:00 |
CNY |
51.00 |
50.60 |
|
Jan. 02 |
00:00 |
EUR |
0.7% |
-0.1% |
|
|
00:00 |
EUR |
1.9% |
1.9% |
|
|
08:00 |
CHF |
1.38 |
1.50 |
|
|
15:00 |
USD |
50.2 |
49.5 |
|
Jan. 03 |
08:00 |
CHF |
1.35 |
1.50 |
|
|
08:30 |
CHF |
48.5 |
48.5 |
|
|
08:55 |
EUR |
10K |
5K |
Upcoming Government Bond
Date Time Country
Thursday, January 5: France will auction an estimated €7-8 billion ($9.1-10.4 billion) in 10-year and other long-term bonds
Tuesday, January 10: Austria will auction €1.3 billion ($1.7 billion) in 5- and 10-year bonds
Thursday, January 12: Spanish 3- and 5-year bond auction
Friday, January 13: Italy will auction medium-long term bonds
Thursday, January 19: France will auction 5-year bonds
Thursday, January 19: Spanish 10-, 15-, and 30-year bond auction
Thursday, January 26: Italian long-term bond auction
Monday, January 30: Italian medium-long term bond auction
Monday, January 30: Belgian bond auction