GBP/USD Daily Forecast - 26 December

Sterling managed to break on the upside during the yesterday's session, though there were no data releases from the UK. However, Sterling still remains on the downside, as it it is quite uncertain when BoE will raise its interest rates. At the moment we cannot expect that this will happen before the third quarter of 2015 as the beginning of the year will be marked by deflation concerns with inflation increasing by only 1.0% last month, but also with parliamentary elections that are scheduled for May.

GBP/USD Weekly Forecast - 15 December - 19 December

Events that marked the week:

European part of session, on Tuesday, was marked by UK Industrial and Manufacturing Production figures. While analysts were predicting 0.2% growth, total production in October 2014 is estimated to have decreased by 0.1% compared with September 2014. Manufacturing was the only one of the four main components to fall, decreasing by 0.7%. Analysts were anticipating 0.3% increase. In the three months to October 2014, production and manufacturing were 10.4% and 5.5% respectively below their figures reached in the pre-downturn GDP peak in Q1 2008.

GBP/USD Daily Forecast - 12 December

There were no major data releases from the UK yesterday. Pair is still struggling with 1.57 handle in week less eventful with UK data. UK labour market remains stable but there are other risks for the economy. Despite stability in labour market, there are still concerns on falling inflation and wage prices growth. Also, US NFP figures indicate that Fed could be raising its interest rates soon. On the other hand, in May UK parliamentary elections will be held, so we cannot expect that BoE will raise interest rates before third quarter of 2015, which is supported by latest BoE officials statements.

Sterling rebounded after initial decline

There are no data releases from the UK today, however, Sterling aimed lower, initially in the session, but managed to rebound, currently being traded around 1.5590 level. Sterling is still being influenced by NFP figures, released on Friday, that showed much better than forecasted data. This indicates stability on US labour market as well as fall in number of unemployed, which could mean that Fed could be raising its interest rates sooner than expected.