Forecasts GBP/USD Parity in MAY 2017

As a general outlook, the parity started to experience strong positive trend at the last days of April. The starting point was at 1.2550 level at the beginning of the month. During the first half of April, we can observe horizontal trend on the GBP/USD parity. After the second part of April, we observed strong increasing trend and the parity reached 1.2849 level which was the highest level of last six months.

Although the UK has signaled economic deterioration, it has performed quite well in comparison to the scenario presented before the Brexit referendum. Retail sales data from the UK in March point to a contraction on a monthly basis. An increase on an annual basis may be said to be an increase below the previous month, but a partial negative effect on the Pound. British Prime Minister T. May said that the 8 June election was not a definite event and that nothing could be guaranteed in this regard. We can say that May has shadowed the positive atmosphere that these explanations created the election.

Apart from economic data on sterling, another important agenda item is the drafting of the European Council Head Tusk for Brexit at the EU summit, which will be held on 29th April without the UK, and negotiations are expected to start if this summit is approved. After the strong recovery, for the first days of April 2017, there could be horizontal trend observe on the GB/USD parity.