Weekly Analysis and Recommendation:
The GBP/USD fell most of the week but remains in a fairly tight range between 1.59 and 1.61 paying little attention to the Bank of England meeting on Thursday. U.K. Business Secretary Vince Cable complained the pound is overvalued, historical trends signal there’ll be few barriers to further gains for a currency powered by the developed world’s fastest-growing economy.
Sterling had its biggest weekly advance in more than three months against the dollar even after sliding today as a report showed construction unexpectedly contracted. The currency was buoyed this week as the International Monetary Fund said the economy would outpace all of its Group-of-Seven peers this year.
The British pound’s tumultuous ride over the past few months looks set to continue, driven by a glum economic picture in the neighboring eurozone and a looming general election. The latest blow comes from the UK Independence Party, which wants Britain to withdraw from the European Union and won its first elected seat in parliament on Thursday. Sterling slipped around 0.5 per cent against the US dollar to $US1.6045 after the by-election result
The Office for National Statistics (ONS) said the UK’s trade deficit in goods and services stood at £1.9bn in August, compared with £3.1bn in July. But the narrowing was down to a fall in imports rather than a rise in exports. Separate figures from the ONS also showed a fall in output from the UK’s construction industry.
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.
Historical: From 2011 to Present
Highest: 1.6618 USD on Aug 19, 2011
Average: 1.5764 USD over this period
Lowest: 1.4832 USD on Mar 12, 2013
Upcoming Major Economic Events for the week of Oct 13-17, 2014