Let’s face it, the UK economy is slowing down, and there is no light at the end of the financial tunnel yet. Despite this fact, the British Pound is still one of the most highly traded currency pairs in the world. A weak pound can be viewed as a bullish economic indicators chart pattern that points to strength for the British Pound, EUR/GBP and USD/JPY. More importantly, a stronger pound can be viewed as a bearish economic indicators chart pattern that points to strength for the Euro, GBP and USD. Regardless of what you think, this does not change the fundamental value of this article which is why I have decided to include this as a weekly US Dollar fundamental forecast.
As the name suggests, this is a weekly analysis on the economic indicators charts in the UK and US. The economic indicators chart patterns are very reliable indicators for determining the direction of the currencies. The US Dollar and the Euro remain strong compared to the national currencies. The Swiss Franc has lost ground against the European Commission’s lead in the last few years. All in all, this is a very useful guide for traders using all the major economic indicators.
A week on from the release of the latest economic indicators data, the Bank of England released its quarterly figures. These data confirmed that consumer spending and industrial production in the UK are showing signs of weakening. The Purchasing Managers Index (PMI) hit a low level, which confirmed that consumers are losing confidence in the UK economic model. The weakening of the Pound Sterling against major currencies was also confirmed by the indications on the economic indicators charts.
With these two major indicators confirmed, the analysts now move on to discuss the political and economic implications. In the UK, a motion of Article 50 has been filed against the UK by the European Union after the Article 50 group decided to start the process of leaving the European Union. The UK Prime Minister announced that he will be negotiating with the European Union to get an exit from the European Union, and that a vote will take place on Article 50 of the Lisbon treaty in the UK on Articleard 3. It is expected that the vote will be a narrow one.
The economic analysts now move on to discussing the effects of the global economic slowdown on the UK economy. They note that the slowing down of China’s economy is having a major negative impact on the UK’s economy. This is a major effect on the British economy because most of the consumer spending in the UK is driven by the high price of Chinese goods. The analysis also discusses how the recent global trade deal with the EU may affect the currency markets. The Deal saw many shares in European companies fall sharply, and this has had a major negative impact on the FTSE100.
The weekly US Dollar Fundamental Outlook notes that the economic fundamentals are pointing to a weak economic recovery in the UK. This is evident from the weak growth in the third quarter of last year. The economic analysts also note that there have been signs of strength in the global economy, but this is being offset by the weakness of the UK economy. In the second half of last year, it looked like the third quarter would be stronger than the first half. However, the analysts are now predicting that the third quarter will experience weakness. The weaker third quarter may see the PMI bounce back slightly, but this will only be short-lived because the Bank of England will raise interest rates.
The FTSE100 saw a slight increase in share prices during the week of May, and this is expected to continue as the economy begins to recover. Traders also noted that the FTSE100 hit a record high as the economic indicators showed that the UK economy was recovering. The weak pound is an important factor for the investors and traders who have been watching the market and are expecting a further dip in the coming weeks.
According to the experts, the market is likely to remain quiet over the coming two weeks with the exception of a small number of announcements. The number of announcements that there are will depend on the amount of trading which takes place. This is because there is a need for the market to calm down before the Bank of England cut their official rate. A large number of traders also predict that there will be no substantial changes in the trading rate until after the Easter holiday, which is scheduled to occur between mid-January to early-February.