GBP/USD Daily Forecast

Tuesday, Nov 24 2015

Focus of yesterday's session was on BoE Inflation Report. Bank of England governor Mark Carney has said that UK interest rates are likely to remain low "for some time". His comments came as he spoke to MPs on the Treasury Committee. UK rates have been held at 0.5% since March 2009. Most economists are not expecting the Bank to raise rates until mid-2016 at the earliest. Mr Carney said that "even with limited and gradual rate increases it still will be a relatively low interest rate environment". He added: "The question in my mind is when the appropriate time for interests to increase and that is strongly consistent with the strength of the domestic economy."

Mr Carney also said that he did not see any need for negative interest rates. And Kirstin Forbes, an external member of the Bank of England's Monetary Policy Committee, who was also giving evidence at the same hearing, said that the next interest rate move would be upwards."Given the state of the UK economy, a solid recovery, I still believe certainly the next move in interest rates will be up, we will not require loosening," she said.

In the US session figures GDP and Consumer Confidence were released. GDP increased at an annual rate of 2.1% in the third quarter of 2015, according to the "second" estimate released by the Bureau of Economic Analysis. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, state and local government spending, residential fixed investment, and exports that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

The Conference Board Consumer Confidence Index, which had decreased moderately in October, declined further in November. The Index now stands at 90.4 (1985=100), down from 99.1 in October. Analysts were predicting increase to 99.3. The Present Situation Index decreased from 114.6 last month to 108.1 in November, while the Expectations Index declined to 78.6 from 88.7 in October.

From the UK tomorrow, only minor importance BBA Mortgage Approvals data will be published. Rise to 45,500 is expected. In the US session Durable Goods Orders, Unemployment Claims and New Home Sales figures are scheduled for a release. Analysts predict 1.6% increase in Durable Goods Orders and incline to 273,00 in Unemployment Claims. New Home Sales should edge up to 500,000.

Figures to watch:

BBA Mortgage Approvals (Wednesday 10:30)

Durable Goods Orders (Wednesday 14:30)

Unemployment Claims (Wednesday 14:30)

New Home Sales (Wednesday 16:00)

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