GBP/USD Daily Forecast – 15 September

Thursday, Sep 14 2017

Focus of the yesterday's session was on BoE's interest rate decision. The Bank of England has said that higher inflation and a pick up in growth could lead to a rate hike in "the coming months". Members of the Bank's nine-strong Monetary Policy Committee voted 7-2 to keep interest rates on hold at 0.25%. But the committee was talking in much stronger terms about an increase, analysts said. The pound climbed more than 1% against the dollar to $1.3363 after the Bank's announcement.

Bank of England Governor Mark Carney said: "The majority of members of the Monetary Policy Committee, myself included, see that that balancing act is beginning to shift, and that in order to... return inflation to that 2% target in a sustainable manner, there may need to be some adjustment of interest rates in the coming months."Now, we'll take that decision based on the data. But yes that possibility has definitely increased."

In the US session CPI and Unemployment Claims data was published. The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.9 percent. Increases in the indexes for gasoline and shelter accounted for nearly all of the seasonally adjusted increase in the all items index. The energy index rose 2.8 percent in August as the gasoline index increased 6.3 percent. The shelter index rose 0.5 percent in August with the rent index up 0.4 percent. The food index rose slightly in August, with the index for food away from home increasing and the food at home index declining.

Separate report on Unemployment Claims showed that in the week ending September 9, the advance figure for seasonally adjusted initial claims was 284,000, a decrease of 14,000 from the previous week's unrevised level of 298,000. The 4-week moving average was 263,250, an increase of 13,000 from the previous week's unrevised average of 250,250. This is the highest level for this average since August 13, 2016 when it was 263,250. Hurricanes Harvey and Irma impacted this week's initial claims.

There will be no major data releases from the UK tomorrow. In the US session Retail Sales, Industrial Production and Consumer Sentiment figures will be published. Analyst anticipate 0.1% increase in Retail Sales and Industrial Production, while Consumer Sentiment should decline to 95.1.

Figures to watch:

Retail Sales (Friday 14:30)

Industrial Production (Friday 15:15)

Prelim UoM Consumer Sentiment (Friday 16:00)

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