“We are the champions, my friends…” Like Queen’s all-time hit, the currency bulls showed that they had no time for losers yesterday as they boosted the Sterling higher across the charts. The pound rallied by more than 1% against the yen, dollar, and franc, with GBPUSD soaring by 177 pips from its open price at 1.5888.
At the start of the European session, the UK’s manufacturing PMI cheered on the risk rally started by the better-than-expected manufacturing PMI from the euro zone. First, June’s data was upgraded from 57.5 to 57.6, which marked the tenth straight monthly growth. Next, while July’s 57.3 reading was lower than the previous month’s, I would say it was necessarily bad news, , especially when expectations were only at 57.1. The positive note followed last week’s retail sales figures, and lured traders into UK’s victory party.
Will today’s data keep the party goin’ for the pound? The construction PMI out at 8:30 am GMT is expected to decline to 58.2 after June’s 58.4 reading, but a higher number might support the recent good vibes in the manufacturing sector.
The Nationwide consumer confidence will also be released today at 11:00 pm GMT, and while it is estimated to fall to 60 from June’s 63 figure, a higher number might signal that consumers aren’t as pessimistic on the government’s budget plans as analysts thought.
Mmmm… Pound-o-licious! The bulls continued to munch on the currency yesterday, giving it its NINTH consecutive win against the dollar. GBPUSD now looks like it’s aiming for the 1.6000 handle after closing at 1.5948 yesterday and giving the Pound a 60-pip gain despite the disappointing PMI figures.
July’s construction PMI figures showed that building activity slowed down during the month, printing at 54.1 and falling short of the 58.2 consensus. That should’ve been an ouchie but it looks like Pound bulls were still all good, thanks to risk appetite.
I wonder if the Pound’s enticing pip aroma will get a boost from today’s economic reports. Hmm, let’s see what we have ahead of us shall we?
At 6:00 am GMT, we have the Halifax HPI on tap which is anticipated to reflect an improvement in the country’s housing sector with the forecast for July up at -0.5% better than June’s -0.6% reading. We then have the services PMI at 7:58 am GMT which is anticipated to have increased from 54.4 in June to 54.5 in July.
If the actual figures overshoot the market’s expectations, we may just see the Pound continue its winning streak against dollar!
Mama Mia! The pound lost a lot of weight against the dollar yesterday, but no, it’s not because the UK economy is getting fit and healthy. The disappointing services data spoiled another attempt to reach GBPUSD’s 1.6000 psychological handle when the pair closed 52 pips lower than its open price at 1.5895.
The Halifax house prices might have given the pound a boost early in the day when it showed a 0.6% increase in home prices last July, a nice improvement from June’s 0.6% decline. Still, traders paid more attention to the services PMI. The data came in at 53.1, which was the lowest reading in twelve months.
This was accompanied by Markit Economics’ report that demand from the public sector is weaker, and that people aren’t singin’ happy tunes to the economy because of the economic threats of the government’s budget plans.
Will the BOE echo the bad vibes on their economy? At 11:00 am GMT, the BOE will be releasing its interest rate decision.
The interest rate is widely expected to remain at 0.50%, but maybe we’ll have to wait for the MPC minutes to know the reasons for their decision. Make sure you read up on Forex Gump’s blog – he just posted a lil’ something about the BOE! Don’t miss this red flag, though, because we might be in for a few surprises!
Yesterday, financial markets proved that they don’t like the intrigue of people heading towards Splitsville as much as Hollywood does. The split decisions of BOE sent negative vibes to traders, and sent GBPJPY 74 pips down from its open price. Meanwhile, EURGBP dropped 27 pips from its intraday high at .8299 and GBPUSD was left virtually unchanged.
Uncertain economic future, high budget deficit and impending budget cuts motivated the BOE to keep their record-low interest rates at 0.50% and their bond holdings target at 200 Billion GBP despite economic growth reaching its fastest pace in four years.
Aww, this must have broken Andrew Sentence’s and David Miles’ hearts after Sentence once again lobbied for a rate hike, while Miles encouraged more bond-shopping.
Apparently the weakening expansion of manufacturing, services, and construction weighed heavier on the BOE’s considerations than the economy’s inflationary pressures. I bet we’ll know more about their decision when the BOE releases their MPC minutes, but for today we got other things to keep us busy.
First up is the monthly manufacturing production due at 8:30 am GMT. Will the data exceed the 0.5% growth expectations? A weaker-than-expected figure would support the BOE’s interest rate decision.
The input prices of manufacturers will also be released today, and a figure lower than the expected 0.4% decline would also support the BOE’s rate.
Also keep your eyes on the US non-farms payroll report today as high volatility is usually seen at the time of the report. Will the data drag the dollar lower and the boost the pound?
It’s all about economic data for GBPUSD! Last Friday, after drifting within a tight range the entire Asian trading session, GBPUSD burst into life once economic data started coming in. The pair fell initially to 1.5845 due to disappointing economic figures from the UK but the losses didn’t last long as the pair was able to regain all of the ground it gave up and even post new yearly highs on worse US data.
There were two key pieces of data that caused GBPUSD to drop early on.
The first one came in the form of the manufacturing production report. It showed that manufacturing production in June merely gained 0.3%, lower than the 0.5% originally expected.
The second one was the producer price index for input. Instead of dropping only 0.4%, producer prices were reported to have decreased by a whole percentage point in July.
As for the worse US data… Well, I’m sure ya’ll know by now, but let me tell you anyway. The non-farm payrolls, the most watched economic report, revealed that a net number of 131,000 people were laid off in July, more than double the predicted figure. To add insult to injury, June’s figure was revised down to show -221,000 jobs lost from -125,000. If the US continues to post such ugly data, it probably won’t be long until we kiss the dollar’s safe haven status goodbye!
For this week, the economic calendar presents bunch of medium-impact economic data like the trade balance, unemployment data, and inflation hearings but nothing super major to cause a pip-migraine. In any case, I’ll make sure to keep you dear readers up-to-date on what’s happening on the forex scene, so check up on my update again tomorrow!
After its magnificent run bullish last week, the pound kicks off this week on a weak note and goes under 1.5900 against the dollar again. Hmm, is this a simple case of profit taking? We’ll just have to wait and see!
Much like yesterday, UK’s economic calendar today presents very little to worry about as only their trade balance is due. Scheduled to come out at 8:30 am GMT, the trade balance is slated to show that imports exceeded imports by 7.8 billion GBP in June. If the deficit comes higher than forecast, we could see Cable give up more ground.
The US economic calendar, in contrast, looks very different. At 6:15 pm GMT, the Fed will announce its decision on interest rates. It is widely expected for the Fed to keep rates steady near zero at 0.25% but do keep an ear out for any QE talk. With deflation concerns in the US picking up momentum, the focus now is whether or not the Fed would implement QE part 2! Stay tuned for that, folks!
Whoa, am I seeing double? Just like the euro, the big FOMC statement managed to ease some of the pound’s losses yesterday, but the currency’s performance against the yen reflects the wariness of the traders. GBPUSD ended the day at 1.5850 after dropping to an intraday low of 1.5711, but EURJPY went on its merry way down by 133 pips from its open price at 135.28.
UK’s economic data might have something to do with the pessimism, after UK’s Department for Communities and Local Government reported no increase in house prices for June and only a 9.9% rise from house prices 12 months ago.
The Royal Institute of Chartered Surveyors also echoed the gloom in housing industry when their survey showed more surveyors reporting house price declines than increases last July. The data supported the fears of a slowdown in demand and economic growth, and drove away the currency bulls.
The only silver lining in the very dark and heavy cloud was the trade balance report which narrowed down to -7.4 Billion GBP from May’s -8.0 Billion GBP. This is probably because exports outside the euro zone were at record-high, which highlighted the importance of demand from economies like the US and China.
Will today be a sunny day for the pound? Their employment figures are on tap at 8:30 am GMT. The jobless claims are expected to fall by 17,000 after June’s 20,000 drop, but a better-than-expected figure might ease the concerns on the economy’s growth.
The BOE will also take the spotlight today at 9:30 am GMT to talk about their quarterly inflation report. The BOE usually uses this piece of 411 to announce any changes in their policies and maybe give some sneak peeks on their outlook on the economy, so don’t miss out on the action!
Beep beep beep You hear that? That could’ve been the sound of the money truck backing up on your lawn had you gone short GBPUSD yesterday! The pair dropped massive pips, falling from its opening price of 1.5849 and finishing at 1.5678.
During the London trading session, the pound was run over by the July claimant count change data. The report revealed a total decrease of 3,800 claims for unemployment benefits, falling short of the anticipated reduction of 17,000. To make matters worse, analysts felt the need to revise the previous month’s figures from a decrease of 20,800 to just 15,900! It seems like the UK’s labor market isn’t recovering as quickly as expected, eh?
The headliner of yesterday’s events was the Bank of England’s decision to slash their 2011 growth forecasts down from 3.6% to 3%. Governor Mervyn King blamed weak consumer and business confidence for the slowdown, and expressed concern over tight credit.
The BOE’s inflation report showed a bit of slowing, too, when it revealed that inflation in Q2 2010 dropped 0.5% from the previous quarter to post a 1.1% uptick in prices. Still, the central bank believes that at this pace, inflation is on track to remain above their 2.0% target, especially with the upcoming value-added tax increase in January. Unfortunately, these rising costs may further curb growth in the UK and hurt their chances of a sustained recovery. Smells like trouble!
Today, we get some time off to let yesterday’s events sink in. No reports on deck! For now, set your eyes across the Atlantic Ocean, where the US is set to publish its weekly unemployment claims report. It might drive GBPUSD today, so catch it at 12:30 pm GMT!
There’s no stopping the pound bears! They imposed their will over the bulls again yesterday to chalk up their fourth straight daily victory. GBPUSD fell another 90 pips from its opening price to finish the day at 1.5568.
No reports were rolled out of the UK, so it seems like risk sentiment is guilty of weakening the pound. Equities were down once again yesterday, confirming investors’ risk aversion.
With no reports scheduled for release today, it looks like you’ll have to monitor risk sentiment to see where GBPUSD is headed. Keep an eye out for the US CPI and retail sales reports due at 12:30 pm GMT. They might just trigger a wave of risk aversion with worse-than-expected results!
Don’t count me out just yet! The pound managed to sneak in gains against the dollar and the euro last Friday despite the cloud of risk aversion still looming above the markets. GBPUSD retained some of its gains at 1.5593 after rising to an intraday high of 1.5680, but EURGBP fell 53 pips from its open price at .8179.
No reports were released from the UK last Friday, so the Sterling rode the price action from the other countries’ economic data. It seemed that markets were still concerned over the slowdown in global growth because the euro still fell across the charts despite printing better-than-expected economic data.
Will we see the pound move on its own price action this week? After all, the UK is set to release some pretty big economic data.
All right, maybe the Rightmove house prices report kicked off the week on the wrong foot when it printed a 1.7% fall in August from July’s 0.6% decline, but the CPI data scheduled tomorrow might be able to provide a boost for the pound. The annualized CPI for July scheduled on Tuesday at 8:30 am GMT is expected to ease at 3.1% from June’s 3.2% inflation rate, but any rate higher than the BOE’s 2.0% target will prompt a letter from the BOE Governor to the Chancellor of the Exchequer George Osborne to explain the BOE’s future actions. Yikes!
The MPC minutes on Wednesday at 8:30 am GMT might also rock the pound charts, especially if it shows something new from the Quarterly Inflation Report last week. Did the hawkish MPC member Andrew Sentence finally get groupies to vote for an interest rate hike? Don’t miss this one!
The last hurrahs for the UK this week are the monthly retail sales, mortgage approvals, and public borrowing reports on tap at 8:30 am GMT on Friday. Better-than-expected figures for these data might suggest that spending remains healthy despite the country’s rising prices, so keep your eyes peeled for these reports!
Finally, the pound is showing signs of life! It completed its back-to-back wins against the USD as GBPUSD rose 30 pips to finish at 1.5653 during yesterday’s trading sessions.
The markets ignored the big 1.7% month-on-month drop in house prices recorded in August to forge the pound’s rebound against the USD. The latest Rightmove house prices index revealed that prices have fallen for the second straight month, following the 0.6% decline seen in July. It seems like tight credit in the UK is really starting to take its toll on its housing market.
Today, you’ve got the July CPI report flying into your mailbox. You’d better be home for it!
Analysts think inflation will soften year-on-year from 3.2% in June to 3.1% in July. So far, the inflation rate has been hovering above the BOE’s target like a fly over Big Pippin’s afro. But the central bank is steadfast in their belief that it will subside once the government’s austerity measures take effect. Let’s see if they’re right later at 8:30 am GMT! If we see an upside surprise, the pound bulls might just extend their winning streak!
Aaand we’re back to our regular programming! Yesterday’s price action saw the pound go back to its losing ways after making modest gains to start the week. I guess it didn’t receive the memo about a risk rally as most of the other major currencies were able to gain ground against the USD. Cable fell 85 pips from its opening price of 1.5653.
The UK rolled out its inflation report yesterday and lo and behold, the BOE might actually be right about inflation being temporary! Though inflation remains above the BOE’s target of 3.0%, results for the month of July showed that CPI grew at an annualized pace of 3.1%, down from 3.2% in June. Month-on-month, this translates to a 0.2% decline in prices! Is inflation beginning to soften?
Still, Governor Mervyn King expressed concern yesterday because this is the eighth straight month that inflation has exceeded the central bank’s target. He’s blaming high fuel prices and the upcoming increase in value added tax for the high inflationary pressures.
Later today, we get a clearer picture of what the BOE really thinks. At 8:30 am GMT, the MPC will be publishing the minutes of its most recent meeting. Stay sharp for any hawkish comments that could send the pound flying. More importantly, find out if someone finally joined Andrew Sentance and voted for a rate hike, too!
News driven – that’s the perfect description for the Cable yesterday. After soaring early on during the European trading session due to hawkish BOE meeting minutes, Cable gave up most of its when risk aversion kicked in late in the US trading session. Cable ended the day at 1.5604, just 26 pips higher from its opening price.
Although the bank chose to hold its rates at 0.50% and keep its Asset Purchasing Facility program unchanged, the BOE meeting minutes revealed that there were some arguments for a small rate hike. BOE Governor Mervyn King confirmed the bank’s slightly hawkish stance when he said that the bank is flexible in terms of interest rates and will move policy in [I]either[/I] direction depending on the inflation outlook.
Wait a minute…
Isn’t the BOE’s benchmark interest rate already at an all-time low of 0.50%?!? If cutting rates is out of the question, then what’s left?!? Very funny King, very funny…
Cable could be in for another wild ride today as UK’s retail sales and public borrowing data are scheduled to come out at 8:30 am GMT.
The retail sales report is predicted to print a 0.4% rise in sales for July, slightly lower than the 0.7% increase seen the month before. Because consumer spending accounts for a huge chunk of UK’s GDP, this report is closely watched by traders. If the actual number comes in below expectations, expect to see Cable to continue giving up its gains yesterday.
Meanwhile, the public borrowing data is slated to show that UK’s public budget deficit fell to 4.3 billion GBP in July, down from 14.5 billion GBP in June.
Data, data, data! Once again, the pound was primarily driven by news yesterday, rising on account of awesome retail sales data but dropping soon after on account of risk aversion. Cable ended the US trading session at 1.5596, barely changed from its Asian session price of 1.5604.
The retail sales report, instead of coming out with a mere 0.3% increase, revealed a whopping 1.1% growth for the month of July. Meanwhile, the core version of the report that excludes fuel in its sales also came out better-than-expected and showed a 0.9% rise versus the 0.2% consensus.
Unfortunately, Cable’s climb from the positively surprisingly retail sales data was short-lived, as weak data from the US triggered a wide-reaching case of risk aversion.
For today, UK’s economic calendar today prove to be less exciting as no major news is scheduled for release. This means that we could see Cable stick to its ranges. Watch out for those previous day highs and low!
As Big Pippinalways says, “Pippin ain’t easy!” Unfortunately for the pound, it learned that the hard way! The pound lost major pips against the USD last Friday as risk aversion stole the scene once again. GBPUSD fell to an intraday low of 1.5464 before it rallied during the New York session to close at 1.5533 and cement a 61-pip loss for the day.
Taking a look at our economic calendar, it seems like the UK will be relatively quiet this week.
You’ll have to wait until the Nationwide house prices report hits stands to get your first taste of a hard-hitting report. Analysts are anticipating a second consecutive decline in house prices as August is forecasted to show a 0.3% downtick following the 0.5% decrease seen in July. Will results come in worse than expected and trigger another pound sell-off? Find out at 2:00 pm GMT on Wednesday!
Also, don’t forget to catch the revised quarterly GDP figures at 8:30 am GMT on Friday. Stay on your toes for this one! You could be in for some big swings if any adjustments are made to the 1.1% growth seen in the preliminary release!
“Wooaah, you got us hatin’ on the Pound,” sang currency traders yesterday as they dumped the currency for the dollar and the yen. The bulls hustled GBPUSD to its intraday high of 1.5618 only to be pounced on by the bears and end the day at its opening price of 1.5520. Against the yen, the pound lost 50 pips as it closed the day at 132.32.
The negative effect on growth by the government’s austerity measures was probably highlighted with the absence of sexy figures from the British economy. What am I talking about? See, a few months back, Chancellor of the Exchequer George Osborne announced that annual budget cuts amounting to 30 billion GBP will be made so that UK can erase its deficit by 2015. Ouch!
This, coupled with the lingering aura of risk aversion in the markets, might have sent an S.O.S. signal to the bears saying, “Come and get me! xoxo Pound.”
However, today may be different for the currency as we have a couple of reports that could get the bulls sighing ooh-la-la in admiration.
At 8:30 am GMT, we’ll see the change in capital expenditures made by firms for the second quarter. If it is higher than the previous reading of 6.0%, we may just see the Pound get some lovin’ because this would indicate that businesses are optimistic about future economic growth.
Along with that we also get to check out the British housing market with the BBA’s mortgage approvals report. Err, it seems like analysts aren’t expecting to be wowed by the figures as the forecast is down by 800 from June’s reading to 34,000.
Make sure you stay tuned to these reports and be ready to catch those pips!
The Pound bulls learned the hard way why currency traders say “Loose lips sink pips.” GBPUSD closed 89 pips lower yesterday at 1.5427 after it dipped to its one-month low at 1.5373. The bulls also have the same sob story with GBPJPY as the bears to drove the pair to its 3-month low at 128.80, before it closed 7 pips higher.
Who damaged the Pound bulls’ ego yesterday?
It was no other than Martin Weale, the newest policymaker down at BoE, who said that the British economy might dip into that big bad R-word again. Uh oh. He said in a newspaper interview that it would be “foolish” to not think that UK may head back into recession. Ooops, I just said the bad word!
Weighing the Pound further was the housing report yesterday which showed that the British Bankers Association only had 33,700 mortgage approvals in July. This probably supported Weale’s pessimistic outlook on the economy as traders might have taken this as a sign that the housing market may be headed into trouble.
Err, it might still be too early to be so sure of this though. Whatcha say we wait for more info before we bet our pips on the downfall of UK’s real estate industry? Let’s stay tuned later for Nationwide’s report on house prices at 6:00 am GMT. The house price index is expected to have decreased by 0.3% in August, which is an improvement from July 0.5% decline. If it prints worse than expected, then we may just be one step closer to proving our theory! Be on your toes and may the pips be with you!
Zip-a-dee-doo-dah, zip-a-dee-ay! My, oh my, what a wonderful day! If you were rooting for the pound, that is! Bulls must have been grinning from ear to ear after seeing the pound recoup some of its recent losses against the yen and the Greenback. After hitting an intraday low of 1.5389, GBPUSD rose to close at 1.5447, recording a modest 18-pip gain for the day.
Pounds bulls have poor US economic data to thank for GBPUSD’s rise. Another set of disappointing reports from the US pointed to a weakening of their economy. Has the Greenback’s safe haven status truly been tarnished or was the pound’s gain just a minor retracement?
Today we’ll see if pound bulls can boogie to the beat of their own economic reports. At 10:00 am GMT, the CBI realized sales data is due. The report is expected to downgrade its reading from 33 to 23 for the month of August, which could mean that although sales are still on the rise, they could be weakening already. Watch out for a downside surprise because pound bears may pounce at the sight of worse-than-expected figures!
The pound proved to be the fiercer diva than the dollar as it pulled off a Pipyonce move on the charts yesterday. It was able to recover some of its losses from last Wednesday when GBPUSD closed 85 pips higher at 1.5533. Smokin’! Too bad the bulls weren’t able to shake the pound’s currency-booty past the 1.5600.
Risk appetite had traders rushing in for higher-yielding currencies during the Asian session. However, the positive sentiment toned down when the European markets opened and buyers probably thought it was best to just take profit. Dang!
Good thing yesterday’s report on consumer spending in the UK came in better than expected. If it didn’t the pound, could probably have ended the day with a loss. The CBI Realized Sales index printed at 35.0, overshooting the consensus which was at 23.0 and the previous reading at 33.0. Holler!
I wonder if the reports we have on tap for the pound today will be able to counter the market’s sour risk sentiment. At 10:00 am GMT we have the country’s revised GDP reading for the second quarter. Analysts are expecting a confirmation of the 1.1% growth that was reported for the preliminary GDP reading.
Data on business investment will also be announced along with that. The government and firms are seen to have reduced their capital investments during the second quarter with the forecast down to 2.3% from the previous reading of 7.8%.
Lastly, remember that risk aversion just lurking around the market so be careful with your trades!
GBPUSD traded lower to its intraday low of 1.5443 after opening at 1.5533. Good thing the pound was able to pull off a Sylpipster Stalone during the New York session, firing BULLets (get it? haha) and punching pips out of the dollar to close the week at 1.5514.
So how did the pound manage to pare some of its losses?
Well, it might have been the upward revision of UK’s initial GDP reading for the second quarter. It was initially said that the British economy grew by 1.1% during the second quarter. But it was announced on Friday that the economy actually expanded at the rate of 1.2% which is the fastest in nine years! What made it more awesome was that analysts weren’t expecting any change in the GDP figures. Now that’s what I call a pleasant surprise!
Then there was also the weaker state of the dollar. The pound bulls should send Fed Reserve Chairman Ben Bernanke a thank-you card for basically saying that the Fed would be open to necessary steps (ahem, quantitative easing measures) that need to be taken to get the world’s largest economy rollin’ back into recovery.
This combo might have been enough for traders to look past the 1.6% decline in capital investments made by firms and the government during the second quarter. The market was expecting the figure to come in at 2.3% following a 7.8% growth during the first quarter. Whew!
I wonder if the pound still has enough piptosterone left to snatch pips in today’s trading. Hmm, I don’t think the GfK consumer confidence will be able to reinforce it though. Analysts are expecting to see further decline in consumer sentiment with the consensus down to -23 in August from July’s -22 reading. Yikes! Tune in to that later at 11:00 pm GMT and be ready to catch those pips!