After the significant decline in the Pound after the referendum on Brexit late June, the pair GBP/USD has consolidated and since early July it is traded in a range of 1.2875 and 1.3365.
Although the economy of the country survived after the Brexit and some economic indicators have even improved, the risk of slowdown in economic growth and the increase in the current account deficit remains. Negative impact of the Brexit on the economic growth in the UK will probably continue for several years, which can cause the decline in GDP growth by 2.1% by the end of 2018.
The decline in the Pound has a positive impact on the UK exports, but negatively affects purchasing power and consumption in the country.
Representative of the Bank of England Mr. Shafiq has said today that there is no doubt that the UK is experiencing severe economic shock and it is likely that monetary infusion will be required to overcome it, which will have a negative impact on the Pound.
On Friday at 11:30 (GMT+3) UK GDP for Q2 will become known. GDP is a indicator of the British general state of the economy. The rise in GDP is a positive factor for the GBP. It is expected that the index will be at the level of +0.6%.
British economic reports are positive lately. The economy of the country survived the Brexit referendum. If the forecast for GDP proves to be correct (+0.6%), the Pound will go up in the market.
At the same time, the USD was supported by positive US macro-economic data yesterday It became known that consumer confidence index rose to the 9-year highs at the level of 104.1 against the forecast of 99.0 and the level of 101.8 in August. Markit PMI in the services sector was at the level of 51.9 in September against the forecast of 51.1 and the level of 51.0 in August.
Last meeting of the US Fed, which finished on 21 September, has demonstrated that the sharp increase in real rates has not been planned. Probability of the rate hike in December is 52% according to market participants. According to some economists the US Fed will not raise interest rate earlier than summer 2017.
Today’s news will include some US data: At 15:30 (GMT+3) the number of orders for durable goods in the USA for August will become known. The forecast is: -1.4% against +4.4% in July. If the forecast proves to be correct, it will have a negative impact on the USD.
Starting from 17:00 and till the end of the day, speeches of some key figures of financial world are scheduled, among which a speech by Janet Yellen, the head of the US Fed (17:00) and a speech by Mario Draghi, a hear of the ECB (17:30).
Volatility will increase from 17:00 and till the end of the trading day when at 23:35 Governor of the Cleveland Fed and a member of FOMC, Loretta Maester will deliver her speech. During her speech market volatility will increase.