The GBP/USD was traded up during last week and thus rallied from its downward trend a couple of weeks back. There are many news items on the agenda that may affect the direction of this currency pair including the GB CPI, the MPC meeting and U.S jobless claims (just to name a few). Currently the GBP/USD is traded slightly down.

Here is a short outlook for the GBP /USD exchange rate including the main news items and events that may affect its direction for March 19^th to 23^rd:

Forex Market March Update:

The GBP to USD rose by 1.1% during last to reach on Friday 1.5846; during March, the GBP /USD slipped by 0.1%.

The chart below shows the development of the GBP to USD during February and March (UTD). It the past couple of months.

Correlations among Exchange Rates – March Update

The chart below is the development of the linear correlation (moving correlation) between the GBP/USD and the Euro/U.S dollar (daily percent changes) during the last six months (up to March 16^th).

The chart demonstrates the strong positive relation between the two exchange rates. The current correlation between the two daily percent changes of these currencies is nearly 0.74 for March. This may suggest the effect (if at all) of the Euro/USD on the direction of the GBP/USD is still robust.

Current Forex Indexes March 20^th

GBP /USD is traded at 1.5852 a 0.26% decrease as of 13:36*.

Euro to US Dollar is traded at 1.3186 a 0.39% decrease as of 13:36*.

(* GMT)

GBP/USD Related News for the Week

Tuesday– Great Britain Consumer Price Index: some expect the February CPI will be lower than in recent months; in the recent CPI report for January the CPI decreased to 3.6%; this news may affect the direction of the British pound;

Tuesday– Bernanke Speech: The speech is titled “The Federal Reserve and the Financial Crisis” Part 1″;

Wednesday– MPC Meeting Minutes: Following last month’s MPC meeting, in which it was announced the rate will remain unchanged at 0.5% and the asset purchase program will remain at £325 billion, the minutes of the meeting may bring some insight behind  the MPC decision monetary policy decision;

Thursday– U.S. Initial Claims Weekly Update: initial claims decreased to 351,000 claims for the week ending on March 10^th; the number of insured unemployment fell by 81 thousand to 3,343 thousand during the week of March 3^rd; the upcoming weekly update may affect the strength of the US dollar and consequently the GBP/USD exchange rate;

Thursday– ECB President Draghi Speaks: Following the recent ECB rate decision in which the rate remained flat at 1% the President of the European Central Bank, Mario Draghi will give a speech. He may refer to the recent Greek debt crisis and the progress of the EU economy. His speech may affect the Euro to US dollar exchange rate and consequently the GBP;

GBP to USD Weekly Outlook

The developments of the Euro/USD will probably also affect the changes in the GBP/USD. Thus if the Euro/USD will keep rising, it might also suggest the GBP/USD will also continue its recent rally. Finally, the financial reports that will come out during the week (listed above) may also determine the direction of the GBP/USD.

For further reading:

• Weekly Outlook for March 19-23
• Gold and Silver Prices Weekly Outlook for March 19-23