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Fixing Started on Pound

The eurobulls flame was put out after the release of German and European GDP data. German and European GDP and manufacturing output ended up lower than expected. The euro/dollar rate fell from its intraday maximum of 1.1264 to 1.1201. After the Bank of England published their quarterly inflation report the pound grew against the euro/pound cross, the euro/dollar partially renewed and was trading around 1.1242.
The British pound grew against the US dollar to 1.5745 on the back of labor market data and lost ground after the Bank of England’s reassessment of their GDP forecast and medium-term inflation forecast. By 14:47 EET the pound was trading around 1.5639 against its 1.5745 maximum.
The central bank dropped its GDP YOY forecasts for 2015 from 2.9% to 2.5%, for 2016 from 2.9% to 2.6% and for 2017 from 2.7% to 2.4%. It increased its forecast for inflation throughout 2015 by 0.1% to 0.6% and dropped its inflation forecast for 2016 by 0.2% to 1.6%. As for interest rates, Carney repeated that the next step would probably be to raise them.
Of this evening’s important events it’s worth looking at the US’ April retail sales report. A reduction in retail sales from 0.9% to 0.2% is expected. The market has already factored this in so it’s hardly worth expecting to see a sharp fall in the dollar. Taking into account that fixing has started on the pound, it’s probable that the rate of the dollar will continue to recover.
Published Data:
Preliminary German GDP data for Q1: 0.3% QOQ, 1.1% YOY (forecasted 0.5% QOQ, 1.2% YOY, previous 0.7% QOQ, 1.6% YOY).
Preliminary Eurozone GDP data for Q1: 0.4% QOQ, 1.0% YOY (forecasted 0.5% QOQ, 1.0% YOY, previous 0.3% QOQ, 0.9% YOY).
Definitive German consumer price index data for April: 0.0% MOM, 0.5% YOY (forecasted -0.1% MOM, 0.4% YOY, previous -0.1% MOM, 0.4% YOY).
The March index for industrial output in Europe: -0.3% MOM, 1.8% YOY (forecasted -0.2% MOM, 1.8% YOY, previous 1.0% MOM – reassessed from 1.1%, 0.4% YOY – reassessed from 1.6%).

14 May, 07:43 (GMT+3)
Eurobulls Set to Push Higher


Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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