Pound Sterling (GBP) Forecast Data Highlights for Week Commencing 25th April

April 25, 2016 - Written by John Cameron

STORY LINK Pound Sterling (GBP) Forecast Data Highlights for Week Commencing 25th April

Federal Reserve Forecast to Hold Benchmark Interest Rate

The most significant risk event in the global currency markets this week comes on Wednesday evening with the latest US Federal Reserve monetary policy announcement. However, this is by no means the only tier one data set due out before the weekend market shutdown. Our leading analyst takes a look at the data sets forecast to trigger market movement below…

Futures markets rarely get it wrong and they price in a 97.7% likelihood that America’s central bank will maintain its headline interest rate at its current level of 0.50% this week. Anything other than a ‘no change’ decision would provoke pronounced price action, with a pre-emptive rate hike from the Fed causing support for the US Dollar (currency : USD) to spiral.

Reserve Bank of New Zealand (RBNZ) Also Predicted to Hold Overnight Cash Rate

The US Federal Reserve monetary policy announcement comes at 1900hrs UK time, but it’s not the only central bank policy decision due on Wednesday evening. In a clear case of ‘afer the Lord Mayor’s Show’, the Reserve Bank of New Zealand (RBNZ) policy announcement follows only three hours later.

After last week’s encouraging WorldDairyTrade auction results, which showed another significant increase in the average hammer price, any move from the RBNZ appears highly unlikely.

A ‘no change’ outcome, leaving New Zealand’s Official Cash Rate at its current level of 2.25%, is widely forecast.

Q1 UK Gross Domestic Product Forecast to Cause Pound Sterling Volatility This Week

Tomorrow afternoon brings the publication of two further sets of tier one American data sets in the form of March’s US Durable Goods Orders and April’s Consumer Confidence figures. Unless either or both print well outside their previous showings of -3.0% and 96.2 respectively, then they are unlikely to budge the Buck ahead of the next day’s Fed announcement.

This week’s main event this week for holders of the Pound Sterling (currency : GBP) is Wednesday morning’s advanced reading of the UK’s Q1 Gross Domestic Product data. The outcome will be juxtaposed with Q4 2015’s year-on-year result of 2.1%; based on sectorial surveys of the British economy published during the first three months of this year, a drop-off in domestic economic activity is forecast. The Pound is therefore predicted to underperform during the second half of this week.

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TAGS: American Dollar Forecasts New Zealand Dollar Forecasts Pound Dollar| Forecasts