Risk sentiment seems to be the main driving force behind the pound’s price action once again. Yesterday, disappointing GDP data from the euro zone couldn’t help but hurt risk appetite in the forex market and taken down GBP/USD. The currency pair fell to 1.5485 from its day open price at 1.5543.
The first estimate of euro zone’s Q4 2012 GDP showed that the economy probably shrank 0.6%, notably worse than the 0.4% contraction the market had initially forecasted. It was euro zone’s worst performance in almost four years.
Today could be a big day in terms of volatility for the pound as U.K.’s retail sales report is scheduled for release. It’s going to come out at 9:30 am GMT and it is expected to show that consumers ramped up their spending in January compared to December.
Market participants believe it’ll print a 0.5% gain, opposite the 0.1% decrease seen the month before. Rising retail sales is normally considered bullish for the domestic currency because it suggests that consumers are comfortable about their financial situation.
Looks like those pound bears are eager to pounce! GBP/USD gapped down over the weekend and opened at 1.5505 after closing at 1.5514 last week. Does this mean the pound will keep trading lower this week?
The U.K. retail sales report printed a weaker than expected reading for January as consumer spending slumped by 0.6% during the month, its fourth consecutive monthly decline. This was a surprise since analysts were expecting to see an increase of 0.5% for the month, which should’ve been a nice rebound over the 0.3% decrease seen last December.
This week, the U.K. is set to print a couple of big reports midweek. The claimant count change, which is expected to show a 5.3K drop in the number of people claiming jobless benefits, is set for release on Wednesday. Along with that, the BOE will print the minutes of its latest monetary policy committee meeting, which should reveal how the policymakers plan to keep the British economy afloat.
No reports are due from the U.K. for the first couple of days of this week so better use this time to do your homework if you plan to trade the big reports on Wednesday!
And the slide continues! The pound started the week off on a low note as GBP/USD resumed its decline to post a 48-pip loss on the day. Will we get more of the same today?
The Rightmove HPI clocked an increase of 2.8% in house prices in February, a nice pickup from last month’s modest 0.2% uptick. Rightmove also reported record inquiries and website activity in January, which is a promising sign of increased interest in the U.K. housing market.
No reports on tap from the U.K. today, but the euro zone is set to release a couple noteworthy reports that could cause volatility on EUR/GBP. Check out my euro zone commentary for the low down, homies!
And the losses keep mounting! For the 5[SUP]th[/SUP] time in the past six days, GBP/USD dropped, as the pair closed 37 pips lower at 1.5424. When will the bleeding stop?!
Rumors that the S&P would downgrade the United Kingdom after the end of the London session weighed heavily on the pound, which is why it was one of the major losers yesterday. Seeing as how we didn’t see a downgrade, we may just see a Cable comeback in today’s trading sessions.
On the other hand, we could also see more pound-selling depending on the results of the upcoming employment data and MPC meeting minutes.
Expectations are that 5,300 less people filed for unemployment benefits last month, which would mark the third consecutive month of improvement. Meanwhile, the unemployment rate is projected to remain steady at 7.7%.
The more pressing data on tap though, is the MPC meeting minutes. Yes, no one’s voted for an expansion of the central bank’s asset purchase facility, but it’ll be interesting to see if anything else was discussed at the last meeting. If it appears that the MPC had a slightly bearish tone at the meet up, it could trigger some more pound selling. Tune in at 9:30 am GMT to find out how it all goes down!
The pound posted another HUGE loss against the dollar as GBP/USD came crashing down to 1.5245 to post a 180-pip drop. Will traders ever get tired of selling the pound??
It has been one of the weakest performers as of late, and the outlook for the pound doesn’t look any brighter, judging by the latest MPC meeting minutes. Just yesterday, word got out that British policymakers voted 6-3 against increasing QE, which means that another member - the Governor Mervyn King himself - saw it fit to add more stimulus.
King joined David Miles and Paul Fisher in voting for an increase to the central bank’s QE program by 25 billion GBP. Considering the ugly numbers the U.K. has been publishing as of late, can you blame them? Remember, the U.K. fell into recession again last quarter, and many feel that it may just be a matter of time before its debt rating gets slashed.
However, there was a silver lining to yesterday’s dark cloud - the January employment report. It revealed a decrease of 12,500 in the number of unemployment claims, far better than the 5,300 decline that the markets had anticipated. Unfortunately, the unemployment rose from 7.7% to 7.8% in the same month.
More reports coming our way today in the form of public sector net borrowing (due 9:30 am GMT) and CBI industrial order expectations (due 11:00 am GMT). Check out our economic calendar to learn more about what to expect from these reports!
Could this be the end of the line for the pound bears? After hitting an intraday low at 1.5132, GBP/USD came roaring back to finish at 1.5240, just 5 pips below its opening price. Could this set the stage for a Friday rally for the bulls?
The pound initially dropped thanks to some risk aversion sparked by the poor euro zone PMIs, but that soon changed once the public sector net borrowing report indicated that the government posted a larger-than-expected surplus last month. After months of posting deficits, the British government actually posted a surplus of 9.9 billion GBP last January, which was slightly higher than the anticipated 9.0 billion GBP figure. This means that the government actually MADE money last January! Boo yea!
In other news, the CBI industrial orders expectations printed at -14, which was both a slight improvement from last month’s reading of -20 and better than the forecasted -16 score.
Nothing lined up from the U.K. today, so make sure y’all stop by my USD and EUR commentaries for some potential market movers. Good luck trading today!
Ugh, so much for a comeback! The pound was unable to extend its rally against the dollar on Friday as it finished the day unchanged at 1.5241.
However, against the yen, the pound was able to score a 44-pip gain, closing at 142.36.
There weren’t any economic data released from the U.K., and if you ask me, that might have caused the pound to fall victim to market sentiment and trade without direction on Friday.
But don’t fret! Perhaps the BBA mortgage approvals report for January will be able to help dictate the currency’s fate on the charts today. Due at 9:30 am GMT, the report is anticipated to come in at 34,200. A better-than-expected figure could be bullish for the pound while a disappointing one could have a bearish effect. Make sure you’re on your toes for it!
After gapping lower to start the week, GBP/USD managed to gain some steam and partially close the gap. The pair finished 95 pips higher to end the day at 1.5188, leaving it around 50 pips below last week’s close.
Surprisingly, the pound was able to stay afloat despite worse-than-expected BBA mortgage approvals figures. Approvals came in at just 32.3K, down from the 33.4K number we saw last month, and short of the 34.2K projection.
The question is whether the pound bulls can keep this up. After all, Moody’s just downgraded the U.K., and this may not be fully priced in yet. Make sure you hit up Forex Gump’s latest piece for a few more reasons why GBP/USD may continue to slide lower!
For today, the big event to lock in on is BOE’s Inflation Report hearings at 10:00 am GMT. At this event, Governor Mervyn King and the rest of the BOE will be talking about the state of the economy and of inflation. It’ll be interesting to see how hawkish or dovish some members are. Watch out, because we could be in for a ton of volatility when the policymakers hit the stage!
The pound fell down the charts in a less-graceful manner than JLaw’s trip at the Oscar’s. GBP/USD finished yesterday’s trading 58 pips lower at 1.5131 while GBP/JPY was down 155 pips at 139.12.
Not much was said at the BOE Inflation Hearings that we didn’t already know. Deputy BOE Governor Paul Tucker said that the central bank members don’t feel that QE has already fully ran its course.
If you ask me, the CBI Realized Sales report for February might have had a bigger impact on the pound. Coming in at 8 versus the forecast for a reading of 15, the figure probably reminded a handful of investors that the U.K. lost its AAA-rating over the weekend!
Today economic data will probably continue to dictate the pound’s price action. At 9:30 am GMT, the second estimate for Q4 2012 GDP will be on tap and no revisions are expected. Should we see a downward revision though, the pound may just extend its losses even further!
The proverbial Hump Day turned out to be a very boring one for GBP/USD. The pair lacked direction the entire day, and simply moved within a relatively tight horizontal channel. It began the day at 1.5130, fell to an intraday low of 1.5080, rose to 1.5189, and then closed the day barely changed at 1.5151.
The forecast for the second estimate of U.K.’s GDP was right on the money. The report confirmed the preliminary release that the economy did contract 0.3% in Q4 2012.
On the downside, the quarterly preliminary business investment report showed that the total value of capital investments made by businesses and the government dropped by a whopping 1.2% in Q4 2012. It was a major disappointment for market participants as they had expected a 2.2% growth.
U.K.’s data cupboard is empty today, but I think we’ll still see a lot of action with the pound. At 1:30 pm GMT, the U.S. will release the second version of its GDP report for Q4 2013. Although this is the second release, it could still have a strong, indirect effect on the pound. If the GDP report misses expectations and comes out worse than expected, market sentiment could take a hit and result in a pound sell-off. Be careful!
Imagine that! The pound managed to hold steady against the U.S. dollar and even bag a few gains against the euro. GBP/USD kept its head above the 1.5150 minor psychological support while EUR/GBP edged close to the .8600 handle. How will the pound fare today?
The lack of top-tier U.K. economic data was probably what kept the pound afloat during yesterday’s trading. It didn’t see any red figures at all! The only report released from the U.K., which was the GfK consumer confidence figure, came in line with expectations at -26 and was unchanged from the previous month’s reading.
For today, the U.K. will release the Nationwide HPI figure and the manufacturing PMI. Of these two reports, the manufacturing PMI will probably have a bigger impact on price action. The report is expected to show an improvement from 50.8 to 51.0, reflecting a stronger expansion in the manufacturing sector. If the actual figure misses the forecast though or if it comes in below the previous month’s reading, the pound could be in for another round of selling. Keep an eye out for the actual release at 9:30 am GMT!
No thanks to a myriad of disappointing data releases, the British pound suffered a bitter defeat against the safe haven U.S. dollar. GBP/USD, after opening up Asian trading session at 1.5173, closed the day 155 pips lower at 1.5018.
On Friday, U.K.’s Manufacturing PMI came in with a reading of 47.9, which was considerably lower than the previous month’s reading of 51.0. This meant that purchasing managers believe that the manufacturing sector is now shrinking, as the reading has fallen below 50.0—the level that divides growth from contraction.
The report on Net Lending to Individuals also failed to meet market consensus. It revealed that lending was only at 600 million GBP in January, almost half the 1.1 billion GBP the market had initially expected. It was also much lower than the 1.8 billion GBP figure seen in December. This could mean that consumers had become less confident about their financial standing and decided not to take out loans instead.
Last but not the least was the Mortgage Approvals report. Like the last two reports I mentioned, mortgage approvals declined. They fell to 55,000 from 56,000. The forecast was for approvals to rise to 57,000.
This week, we’ve got a lot of red flags on U.K.’s economic calendar. Today, at 9:30 am GMT, the Construction PMI will be published. It’s projected to print a reading of 49.2, up from the previous month’s 48.7.
On Wednesday, BOE Governor Mervyn King will be doing a speech in front of the Parliamentary Committee. He’ll be talking about the banking standards of the country.
The biggest event for the pound will happen on Thursday, when the BOE will announce its decision on interest rates. Market participants widely expect the central bank to keep rates at 0.50% and hold off on further quantitative easing. Now, on the off chance that the central bank opts to implement more economic stimulus, we could see the pound take another beating. Stay tuned for this, folks!
Hi-yah! The pound pulled a Bruce Lee on the currency bears yesterday when it shrugged off their hits and proceeded to end the day in the green. Cable shot up by 66 pips while Guppy climbed by 33 pips.
The pound bears launched their attack early in the London session yesterday when the U.K. construction PMI fell to a 46.8 reading in February, lower than the expected 49.0 figure and the fastest pace of decline since October 2009. So much for a recovery in the housing sector, huh?
Good thing that the market players paid attention to the pound pairs’ technical levels. Word around the hood is that the pound’s oversold levels attracted bargain hunters. Not only that, but the pound is also getting back its status as the “safe haven” among the European currencies.
The pound isn’t out of the woods yet though. Today at 1:00 am GMT the U.K. will print its BRC retail sales monitor report. More importantly, we’ll also see services PMI report at 10:30 am GMT. With services representing 70% of economic activity in the U.K., you can bet your grandma’s pie that investors would be watching this release!
The British pound moved in two distinct waves yesterday. The first move was up, as U.K.’s Services PMI came in slightly better than expected. Unfortunately, during the U.S. trading session, the pound was weighed down once again by the political uncertainty surrounding Italy. GBP/USD began the day at 1.5112, rose as high as 1.5200, and then dropped back down to close the day barely changed at 1.5114.
U.K.’s Services PMI yesterday printed a reading of 51.8, which was mildly higher than the 51.1 forecast. It was also an improvement from the previous month’s 51.5. The solid PMI reading reduces that chance that the U.K. would fall into another technical recession.
No data on the docket today, but Bank of England (BOE) Governor Mervyn King is scheduled to speak in front of the Parliamentary Committee in London at 9:45 am GMT today. With the BOE interest rate decision coming up tomorrow, traders all ears on what he has to say. Let’s see if he’ll drop clues on what the BOE is planning to do with monetary policy!
The pound just can’t catch a break, can it? Despite better-than-expected reports from the U.K., the pound ended the day in the red against the dollar, euro, and the yen. What the heck happened?
Well, it seems that investors are paying more attention to a possible increase in the BOE’s asset purchases than the U.K.’s economic reports. Yesterday we saw the BRC shop price index print a 1.1% growth in February, which is way better than the 0.6% growth in January. Not only that, but the Halifax house price index also grew by 0.5% in the same month, faster than January’s 0.3% decline.
But the market players mostly shrugged off the good data and focused on the possibility that MPC head honcho Mervyn King has convinced enough members to join his dove camp and add to their asset purchases. The BOE’s monetary policy decision is scheduled at 1:00 pm GMT so make sure that you have prepared your trade strategies long before that!
Thanks to the BOE’s decision to keep monetary policy unchanged, GBP/USD was able to stay above the 1.5000 mark and bounce up to a high of 1.5082. However, the rally was short-lived as the pair slid back to the 1.5020 area at the end of the day.
BOE Governor Mervyn King and his men decided to keep interest rates unchanged as expected and make no changes to their current asset purchase program of 375 billion GBP. Although the pound initially rallied the first few hours right after the announcement, the currency was unable to hold on to its gains as market participants remembered that the lack of easing this time could increase the odds of further asset purchases next time. It will be interesting to see exactly how many members joined BOE Governor King in increasing asset purchases as a larger number of doves could eventually tip the scales towards looser monetary policy.
There are no major reports due from the U.K. today as pound pairs could continue to trade off the resulting sentiment from the latest BOE rate decision. If you’re trading GBP/USD though, don’t forget that today is NFP Friday and that we could see some fireworks across dollar pairs!
The pound’s price action was as mixed as the colors of my sneakers when a positive U.S. jobs data sparked risk appetite but boosted the Greenback at the same time. Cable dropped to its two-and-a-half year lows at the NFP report while Guppy capped the day with a 14-pip gain.
Last Friday the U.K. only printed the consumer inflation expectations data, which showed that consumers are expecting prices to rise by 3.6% in March, a bit higher than their 3.5% prediction for February.
But the pound bulls and bears paid more attention to the big NFP report in the U.S., which blew all optimistic expectations out of the park. Check out my U.S. Dollar commentary for the deets!
This week the U.K. doesn’t have a lot on its plate as its major reports are all scheduled for tomorrow. No reports will be printed today so make sure that you keep your eyes on the economic data popping up from the other major economies!
Cable got knocked down to another new low during yesterday’s trading as GBP/USD fell from the 1.4940 area to a low of 1.4865. GBP/JPY had a rough start as well but it managed to rally back above the 143.00 handle at the end of the day.
There were no major reports released from the U.K. on Monday yet pound pairs still managed to make some huge moves across the charts. Earlier today, the U.K. printed a weaker than expected RICS house price balance which revealed that 6% of home surveyors reported a price decline in their area.
Later on, the U.K. will release its manufacturing production report for January and possibly show a flat reading for the month. The U.K. trade balance is also set for release during today’s London session and the report is expected to print an 8.8 billion GBP deficit, slightly smaller than the previous 8.9 billion GBP shortfall. Keep an eye out for the actual data at 9:30 pm GMT!
Oh boy! There it goes again! Thanks to ugly production figures, the pound resumed its slide and carved a new low against the dollar. GBP/USD dropped to as low as 1.4831 before settling at 1.4905 with a 16-pip loss on the day.
Apparently, economists weren’t pessimistic enough with their January production forecasts. Instead of staying flat as many had predicted, manufacturing production slid 1.5%. Meanwhile, industrial production dropped 1.2% versus the forecasted 0.1% uptick. At this point, it really is starting to look as though the U.K. is on the brink of another recession!
In other news, the trade balance report, which was also released yesterday, provided the day’s only silver lining, as it showed a deficit of 8.2 billion GBP, which is just below the 8.8 billion GBP forecast. Still, this didn’t seem to phase pound sellers, who after seeing the disappointing manufacturing results, seem convinced that it’s only a matter of time until the BOE eases monetary policy further.
Looking ahead, we don’t have any reports coming out of the U.K. today. In the meantime, set your eyes across the Atlantic where the U.S. is scheduled to publish some potential market-movers that may shake up GBP/USD. Good luck, fellas!
Crash and burn, baby! After climbing to a high of 1.4981, GBP/USD erased all of its gains for the day and tumbled to the 1.4910 area. GBP/JPY, on the other hand, managed to stay afloat as it consolidated above 143.00.
Stronger than expected U.S. retail sales figures triggered strong dollar buying during yesterday’s New York session, forcing GBP/USD to retreat from its recent rally. The U.K. didn’t release any economic data then and isn’t set to release any today, which suggests that GBP/USD could be strongly affected by U.S. data once more. Take note that Uncle Sam will release the PPI and unemployment claims figures at 1:30 pm GMT.