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GBP/USD Weekly Forecast – 03 July – 07 July

Friday, Jun 30 2017
GBP/USD Weekly Forecast – 03 July – 07 July

Events that marked the week:

Focus of Tuesday's session was on BoE's Financial Stability Report. The Bank of England is preparing itself for the worst when it comes to Brexit. Mark Carney said on Tuesday that the central bank is putting contingencies in place for the possibility that Britain drops out of the European Union without any deal in just under two years time. Speaking after the bank released its twice-annual Financial Stability Report, Carney told reporters that the bank is - sensibly enough - making plans for all possible Brexit scenarios "however unlikely" to ensure it is as prepared as it can be for the country's departure from the EU, and the impact it may have on financial stability.

From the UK, on Thursday, Net Lending to Individuals figures were released. Britain’s hard-pressed consumers are increasingly turning to credit cards, overdrafts and loans to support their spending, according to the Bank of England. Threadneedle Street’s monthly report on money and credit found that the outstanding amount of unsecured consumer credit rose by 10.3% in the year to May, five times as fast as the growth rate of earnings.

 

From the UK, on Friday, Current Account and GDP figures were released. The UK’s current account deficit was £16.9 billion in Quarter 1 (Jan to Mar) 2017, a widening of £4.8 billion from a deficit of £12.1 billion in Quarter 4 (Oct to Dec) 2016, due predominantly to a widening in the deficit on trade; the current account deficit in Quarter 1 2017 equated to 3.4% of gross domestic product (GDP) at current market prices, up from 2.4% in Quarter 4 2016. The total trade deficit widened to £8.8 billion in Quarter 1 2017 following a sharp narrowing of the deficit in Quarter 4 2016 (£4.8 billion); this was due to a widening in the deficit on trade in goods and a narrowing in the surplus on trade in services.

 

Separate report showed that gross domestic product (GDP) and its components are little changed from the previous estimates published on 25 May 2017. UK GDP in volume terms was estimated to have increased by 0.2% between Quarter 4 (Oct to Dec) 2016 and Quarter 1 (Jan to Mar) 2017, unrevised from the previous estimate published on 25 May 2017; growth was driven by output from the business services and finance, and construction industries, partially offset by declines in some consumer-focused industries. UK GDP growth in volume terms increased by 2.0% between Quarter 1 2016 and Quarter 1 2017, unrevised from the previous estimate.

 

This week markets will be looking at:

 

Manufacturing PMI (Monday 10:30)

Construction PMI (Tuesday 10:30)

Services PMI (Wednesday 10:30)

Industrial Production (Friday 10:30)

More in this category: « EUR/USD Daily Forecast – 30 June AUD/USD Daily Forecast – 03 July »

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