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GBP/USD Weekly Forecast - 18 June - 22 June

Saturday, Jun 16 2018
GBP/USD Weekly Forecast - 18 June - 22 June

GBP/USD had a bad week, succumbing to the strength of the US dollar and the Brexit Bill compromises by UK government. The UK government had to reach a compromise with the pro-Remain rebels in order to secure a victory in Parliament over the amendments suggested by the House of Lords. This could lead to a softer Brexit, but other factors complicated the picture. UK inflation disappointed with 2.4% y/y, weighing on Sterling. The jobs report was mixed with unimpressive salaries but a drop in jobless claims, while retail sales beat expectations. In the US, the Fed raised interest rates and signaled two additional moves. The hawkish hike took time to materialize in markets and the greenback exploded only after American retail sales beat expectations. GBP/USD fell sharply.

 

Major events for the coming week:

  1. Rightmove HPI: Sunday, 23:01.
  2. CBI Industrial Order Expectations: Wednesday, 10:10. Britain’s industry is suffering as a drop of -3 was seen last time. The A bounce back to positive ground, 1 point, is on the cards this time.
  3. Public Sector Net Borrowing: Thursday, 8:30. The British government borrowed a total of 6.2 billion pounds, within normal ranges. A small squeeze in public lending is likely: 5.1 billion.
  4. UK rate decision: Thursday, 11:00. The Bank of England is expected to leave its policy unchanged once again in this meeting which does not include the publication of the Quarterly Inflation Report nor a press conference.
  5. Mark Carney talks: Thursday, 20:15. The Governor of the BOE will deliver an important speech at Mansion House. In the past, he used the occasion to signals changes in monetary policy, sometimes not in line with the thoughts of other members. Any hawkish twist may be treated with suspicion but could still move the pound. Carney speaks at a time when liquidity is low, so any surprise could have an outsized impact.
  6. BOE Quarterly Bulletin: Friday, 11:00.

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