Party’s over, boys! The pound broke its winning streak against its counterparts yesterday despite the release of strong retail numbers in the U.K. Cable plunged by a ridiculous 98 pips while GBP/JPY also fell by 33 pips. What gives?
The U.K.’s retail sales should’ve made the pound bulls giddy. The data showed a 0.6% gain in September, higher than the 0.1% downtick in August and analyst expectations of a 0.4% growth. Apparently, Britons got excited over clothes as clothing sales jumped by 2%.
Unfortunately, risk aversion reigned supreme during the U.S. session and erased the pound’s gains against its counterparts. Read all about what went down in the markets in my USD piece!
Only the public borrowing data is scheduled for release today at 8:30 am GMT. The data is expected to be weaker than its previous 12.4 billion GBP reading, so watch your charts closely for major inflection points that you can trade!
For the second straight day, the British pound was weighed down heavily by risk aversion. Against the safe haven U.S. dollar, the pound marked a 33-pip loss. Meanwhile, versus the low-yielding Japanese yen, the pound fell 23 pips.
The blow to risk sentiment came from the absence of concrete action with regards to a Spanish bailout in the EU summit. The only notable outcome of the EU summit was the agreement that the ECB would eventually be the chief banking supervisor in Europe. There was also the news that Germany once again showed opposition to using the ESM to directly re-capitalize banks in Europe.
In other news, the Public Sector Net Borrowing report beat forecast and came in with only a 10.7 billion deficit. The market had initially expected an 11.9 billion GBP deficit.
The upcoming week will be a heavy one as two major events are scheduled to happen.
On Wednesday, BOE Governor Mervyn King will be speaking at the Chamber of Commerce. With the BOE’s asset purchase program scheduled to end in November, traders will be closely monitoring what King has to say with regards to future monetary policy.
On Thursday, the U.K.’s preliminary GDP reading will be published. It’s expected to show that the country expanded 0.6% in the third quarter of this year, opposite the 0.4% contraction (revised up from-0.7%) seen during the second quarter. A rising GDP is usually considered bullish for the domestic currency, as it means that the economy is healthy.
The pound’s price action was as mixed as a hotpot yesterday as the currency warriors traded on risk sentiment. Though Cable steadied at 1.6010, Guppy had shot up by more than 100 pips to 127.97. Meanwhile, EUR/GBP inched 24 pips higher at .8156. Talk about sending mixed signals!
The U.K. didn’t release any major data yesterday, so the pound bulls and bears paid attention to the improvement in risk appetite in the euro region. Apparently, traders are optimistic that the bailout odds will be in Spain’s favor after the regional elections last weekend.
The pound gained against the yen, thanks to a not-so-surprisingly weak trade deficit numbers from the Land of the Rising Sun.
Today at 8:30 am GMT the BBA mortgage approvals data will take center stage. The report is expected to improve from its numbers last month, but keep your eyes peeled for any surprises.
At 5:00 pm GMT BOE head honcho Mervyn King will also be under the spotlight as he delivers a speech. Watch this event closely for any signs of more QE down the road, aight?
Tough day at work for the pound! GBP/USD ended the day in the red as it closed at 1.5951, 58 pips down from its 1.6009 open price, while GBP/JPY dipped 5 pips below the 127.00 handle before closing at 127.33. Will today be any better for the pound?
The U.K. didn’t release any economic reports yesterday, leaving risk sentiment as the primary driver of price action for the pound pairs. Unfortunately for GBP/USD and GBP/JPY, risk was off yesterday as U.S. equities slid down with the S&P 500 index slipping by 1.4%.
Up ahead, only the CBI industrial orders report is set for release from the U.K. at 11:00 am GMT. The figure for October is slated to climb from -8 to -6, which would still reflect decreasing order volumes but at a slower pace. Bear in mind that a weaker than expected reading could trigger another pound selloff so y’all better stay on your toes during the actual release!
Not so fast, pound bears! The pound erased some of its intraweek losses against its counterparts yesterday when expectations strong U.K. data boosted motivated the currency bulls. Cable popped up by 80 pips while EUR/GBP plummeted by 82 pips. Booyah!
The CBI industrial orders expectations gave little encouragement for the pound bulls yesterday when it came in at -23, a 10-month low, when analysts were only expecting a reading of -6. Apparently, business owners were concerned about the country’s manufacturing activity as well as the political and economic conditions abroad.
Good thing that investors had their eyes on the GDP report scheduled today at 8:30 am GMT! With retail sales and trade numbers showing improvements lately, market geeks are expecting the U.K. to climb out of the recession today by showing positive growth for the first time in three quarters.
The services index is also due for release around the same time as the GDP report, but I have a feeling that market movers won’t pay attention to that. So get your trading plans ready and focus on the U.K. GDP report, kids!
Bravo, old chap! The pound was the king of the currency hill yesterday, as it soared up the charts! GBP/USD rose 101 pips to finish at 1.6131, while GBP/JPY finished a ridiculous 159 pips higher at 129.56.
Now that’s how you end a recession with a bang! For the first time in a year, the U.K. economy posted positive GDP growth, as it grew an impressive 1.0% during the third quarter. Not only did it end the losing streak, but it also came in much better than the anticipated 0.6% increase.
Apparently, the Olympics, a slew of holidays, and a major improvement in the services sector all played a key role in lifting up the U.K. economy. The only question is, can the economy continue this performance in the fourth quarter?
No data lined up from our economic calendar today, so chances are we’ll see risk sentiment drive the markets today. Good luck trading today fellas!
Talk about letting a rally fizzle! The pound was unable to extend its gains for a third straight day as it ended the week on a low note. After trading below its opening price for almost the entire day, Cable settled 38 pips lower at 1.6093.
Looks like traders finally got their fill pounds because by Friday, demand for the pound had died down! It’s possible that many had taken profit on their positions, considering that the pound had gained so many pips in the previous two days.
Today, we only have the net lending to individuals report on tap, and it’s said that it will print a 0.6 billion GBP increase to undo August’s 0.4% decline. Though this report isn’t historically known as a major market mover, it could provide us with valuable insight on the state of the U.K. credit market.
Later in the week, the manufacturing PMI will be available. Forecasts say that the manufacturing industry probably contracted once again. The index is expected to slide from 48.4 to 48.1 and will be available on Thursday.
To cap off our week, we’ll take a look at the construction PMI, which is slated to tick down from a reading of 49.5 to 49.1. Catch the report when it comes out on Friday.
That is NOT how you wanna start off the week! The pound continued its misery from Friday, as it dropped another 81 pips versus the dollar, leaving GBP/USD to finish the day at 1.6033. Will the pound’s troubles continue or will we see a small pullback today?
In terms of actual data, the U.K. actually received better-than-expected news as the net lending to individuals report showed that British banks actually lent out 1.7 billion GBP last September. Not only was this nearly triple the expected increase of 600 million GBP, but it also marked the highest level in 4 years. This means that there’s more liquidity that’s hitting bottom-line consumers, which should translate to more spending and investing.
However, the pound still took a hit thanks to uber-cautious comments by BOE Deputy Governor Bean (no, not that Mr. Bean!). According to Bean, while there are reasons to remain optimistic, the economy is still in a bumpy ride and there’s a good chance that Q4 GDP growth will disappoint. His dovishness on the economy weighed down on the pound, causing the bears to take over.
For today, we’ve got the CBI realized sales report clocking in at 11:00 am GMT. The index is projected to print a reading of 7, marking a slight improvement from last month’s score of 6. If it comes in much higher than that, it could give the bulls enough fuel to make a comeback today.
The pound may have had its way with the dollar, but it could only salvage a draw against the yen. After a full day of trading, GBP/USD ended 45 pips higher at 1.6077 while GBP/JPY finished virtually unchanged at 127.99.
Although the CBI realized sales report revealed a huge upside surprise, market players weren’t really moved by its results and price action on pound pairs were hardly affected. The index printed a reading of 30, which is over 4 times the expected reading. Not only did October’s stats far exceed expectations, but it also marks the fastest rate of growth since June. The best part is that retailers believe they’ll see the same kind of robust growth next month!
Now on to more somber news - the GfK consumer confidence report. The index, which was published just a few hours ago, printed a reading of -30, which is slightly lower than the -28 reading that many were expecting to see. This comes as terrible news considering the U.K. just crawled out of recession. It makes me wonder if the U.K. can maintain its current rate of growth with consumer confidence on the way down.
No more reports from the U.K. today. In the meantime, I suggest y’all keep tabs on risk sentiment!
For the second straight day yesterday, Cable was able to trade positively. The pair, which opened the day at 1.6077, consolidated for the most part of the Asian session and then surged higher during the European and U.S. trading session.
There wasn’t much in terms of data yesterday as only the Gfk Consumer Confidence survey for October was released. It published a reading of -30, which was slightly higher than both forecast and the previous period’s reading. It was also at its lowest reading in 6 months.
According to the details of the survey, while the Olympics was able to boost the country’s growth rate, people still became more worried about their financial situation over the next 12 months.
Today, two major reports will come out that could have a strong effect on Cable’s price action.
The first one, which will be published at 7:00 am GMT, is the Nationwide House Price Index. It’s projected to show that the selling price of new homes with mortgages back by Nationwide rose by 0.2%, opposite the 0.4% decline seen the month before. Rising house prices are normally seen as bullish for the domestic currency as it could attract investors in the housing sector.
The second report you should keep an eye out for is the Manufacturing PMI. It’s going to come out at 9:30 am GMT and it is expected to print a reading of 48.1. Last month, the reading was at 48.4. A reading below 50.0 means indicates that the manufacturing industry is contracting.
What a letdown! It looked as though GBP/USD was going to finish the day above 1.6150, but sellers dragged the pair back down in the New York session, forcing it to close at 1.6124, down 14 pips on the day.
The contraction in the U.K.'s manufacturing industry worsened last month, as evidenced by the decline in the manufacturing PMI. The index dropped sharply from 48.1 to 47.5, strengthening pressure on the BOE to whip out more QE to support the economy.
Today, we have the construction PMI on tap, and survey says that it could be just as disappointing. Experts believe that the index could slide from 49.5 to 49.1. If the report fails to meet forecasts, it could lead to another pound sell-off as traders price in the possibility of more stimulus from the BOE’s meeting next week.
Talk about a bloodbath! The pound took a beating on Friday, as risk aversion swept through the markets during the New York session. GBP/USD dropped 106 pips to finish at 1.6018, while GBP/JPY closed 42 pips lower at 128.83.
We actually saw a better-than-expected result from the construction PMI, which rose from 49.5 to 50.9. It was projected to come in at just 49.1.
The problem though, was that we saw a strong sell-off after the release of the U.S. NFP report, allowing the scrilla to emerge victorious. Make sure y’all hit up my U.S. commentary for the 411 on the payrolls report!
For today, we’ve got the services PMI on tap at 9:30 am GMT. Expectations are that the report will print at 52.0, which would be a slight drop from last month’s reading of 52.2. If the reading comes in higher than anticipated, it could give the pound a nice boost to bounce back from Friday’s losses.
Look out below! The pound fell like a rock in yesterday’s trading following the release of worse-than-expected data from the U.K. GBP/USD fell from its intraday high of 1.6040 and hit a bottom at 1.5957 before closing the day 39 pips below its opening price at 1.5972.
The U.K. services PMI report for October printed lower at 50.6 than the 52.0 consensus and September’s 52.2 reading. Of course, the reading didn’t bode well for the pound as it indicates that conditions in the sector, which makes up over 70% of the British economy, aren’t looking good.
On top of that, the BRC retail sales monitor showed that consumer spending contracted by 0.1% in October after posting a 1.5% uptick the month prior.
Today the manufacturing production report for October will be on tap and chances are, it would probably affect the pound’s price action. Due at 9:30 am GMT, the report is expected to show that manufacturing activity picked up during the month with the consensus at 0.3%.
A better-than-expected figure could send the pound higher but a disappointing one could fuel its sell-off even more. Watch out for it, ayt?
With the markets focusing their attentions on the U.S. elections, we didn’t see much movement on GBP/USD yesterday. The pair traded within its average daily range and finished at 1.5994, just 22 pips above its opening price.
Even worse-than-expected manufacturing production data couldn’t give the bears enough mojo to send the pound to new lows. Manufacturing production growth clocked in at just 0.1% last month, which was below the 0.3% forecast. Furthermore, the previous month’s release was revised down to show a 1.2% decline.
Meanwhile, NIESR released its GDP estimate, projecting that the U.K. economy grew by 0.5% during the third quarter. While this is nice and dandy, it still doesn’t match up with the upwardly revised 1.0% growth we saw during the 2[SUP]nd[/SUP] quarter.
No data lined up today, but that doesn’t mean you can chill out. The Bank of England will be making its interest rate decision tomorrow and for all we know, traders may begin positioning themselves as early as today. Good luck trading, homies!
Doji alert! Without anything on tap from the U.K., GBP/USD finished the day almost unchanged from its opening price. The pair was down by 7 pips at 1.5994 from its opening price when the New York session closed.
Don’t think that we didn’t see any action on the pair though! The announcement of the re-election of President Obama boosted the pair to an intraday high of 1.6044. However, worried remarks from the European Commission regarding the EZ economy soon spurred risk aversion and sent GBP/USD trading lower.
Today will probably be a big day for the pound. Note that the BOE is set to make its rate statement at 12:00 pm GMT. No one expects the central bank to raise rates. However, with recent economic data from the U.K. having taken a turn for the worse, we could see some weakness in the pound if the central bank comes off dovish.
Make sure you don’t miss it, ayt?
GBP/USD’s price action yesterday was as crazy as a loon! At first, the pair consolidated within a tight range. And then, just when the European trading session opened, the pair broke out to the downside and forged fresh 2-week lows. But that wasn’t the end of it! When the BOE announcement came, traders suddenly changed moods and decided to buy the pair up, allowing it to close near its opening level that day.
The Bank of England’s interest rate decision came in line with expectations. The central bank chose not to pump more cash into the economy and keep the rates unchanged at 0.50%.
Apparently, some members of the central bank are worried that inflation might get out of hand if they ease again. Nevertheless, a few economists are betting that the BOE will expand the asset purchase facility by another 50 billion GBP during the first quarter of 2013.
Today, the country’s trade balance will be the report to keep an eye out for. It’s scheduled to be published at 9:30 pm GMT and is expected to show a 9.1 billion GBP deficit. Last month, the deficit was at 9.8 billion GBP.
The pound was cruisin’ up the fast lane early on in Friday’s trading, tapping an intraday high at 1.6020 against the dollar, when the bears suddenly rained on its parade. GBP/USD then fell like a rock and closed the day with a 77-pip loss at 1.5903.
Once again, risk aversion was the culprit for the pound’s loss as concerns about the euro zone continued to weigh on investors’ appetite for risk. In fact, traders were so jittery that they merely shrugged off the positive trade data released from the U.K.
It was reported that British exports increased and imports decreased in September, resulting to a narrower trade deficit of 8.4 billion GBP for the month from -10 billion GBP in August. The reading even topped the market consensus which was for a 9.1 billion GBP deficit but still, the pound didn’t get any lovin’. Bummer, eh?
We don’t have any report from the U.K. today which will probably leave the pound at the mercy of market sentiment. But fret not! This week will be a big one for the pound with a series of tier-1 U.K. data on tap. Head on over to our spankin’ awesome forex calendar and check 'em out for yourself!
If I were to sum up Cable’s price action yesterday in one word, it would be “range.” Due to the absence of market-moving events and U.S. traders out celebrating Veterans Day, the pair simply moved sideways the entire day, finding resistance at 1.5916 and support at 1.5864.
Earlier today, the RICS House Price Balance survey was released. It showed that participants of the survey reported a bounce in new buyer inquiries in October. Specifically, 18% more respondents reported rises than falls. The supply side also rose at its fastest rate since April 2011. The data showed that 12% more participants reported that there was a rise in sellers.
More data will be coming your way today. At 9:30 am GMT, the U.K.’s Consumer Price Index (CPI) and the Producer Price Index Input (PPI Input) will be published. The October CPI is predicted to show that the inflation rate has risen to 2.3% from September’s 2.2%.
Meanwhile, the PPI for Input is expected to show a decrease of 0.4% in October from the previous month’s 0.2% decline.
Also note that if the CPI goes below or above Bank of England (BOE)'s 1.0%-3.0% target, also expect the BOE to release a letter to British Parliament explaining what happened and what measures are being done to fix the situation.
Strike five for the pound bulls! Thanks to risk aversion and not-so-awesome economic reports, the pound ended the day slightly lower against its counterparts. Cable lost 6 pips while Guppy fell by 14 pips. What were the U.K. reports about anyway?
If the pound junkies had traded purely on economic reports, then the bulls might have had a chance. The country’s CPI came in at 2.7%, a jump from the 2.2% that we saw last month. Since the BOE folks are already worried about the stimulus measures firing up inflation, the report all but signaled a non-action by the BOE next month.
The PPI input report also should’ve encouraged the bulls as it printed a 0.4% rise after falling by 0.1% in September. The house price index wasn’t so hot though, as it only showed a 1.7% growth when market geeks were expecting a 2.1% uptick.
Today we’ll get our hands on more major reports. The claimant count change is expected at 10:30 am GMT, around the same time when the unemployment rate and the average earnings index data are also scheduled for release.
At 11:30 am GMT BOE head honcho Mervyn King will take center stage as he gives the inflation report. Will the uptick in inflation convince the central bank to stay put in their policies for next month? Keep your eyes peeled for these reports!
Are those fresh 10-week lows I see on GBP/USD? Why, yes they are! No thanks to the dovish tone of the BOE’s quarterly inflation report, GBP/USD was sold-off heavily yesterday. It started the day at 1.5874, dropped to its lowest level in 10 weeks at 1.5839, and then closed the U.S. trading session at 1.5854.
In its quarterly inflation report, the BOE downgraded the U.K.’s economic forecasts and said that growth would probably be weak for an extended period of time. The BOE projects that GDP will grow by 2% in 2 years and inflation will be around 1.9%. The quarterly inflation report also suggested that the central bank hasn’t ruled out expanding its asset purchase facility.
In other news, U.K.’s employment data came in mixed. The Claimant Count Change came in worse than expected as it showed that there was a 10,100 increase in the number of people who claimed for jobless insurance in October. In contrast, the unemployment rate fell to 7.8% from 7.9%.
Today, we’ve got U.K.’s retail sales report on deck. It’s projected to show that sales fell 0.1% in October after it had risen 0.6% the month before. Falling retail sales are considered bearish for the domestic currency. The actual result will publish at 9:30 am GMT.