With the London markets closed, the pound started off the week on a sour note, as risk aversion took over markets. GBPUSD dropped 100 pips from its highs for the day, closing at 1.5461. Could this be a sign of worse things to come later this week?
The only report that came out from the UK yesterday was the Gfk consumer confidence index, which thankfully printed better than expected. The index printed a reading of -18, beating consensus of -23 and was a slight improvement from July. Take note, this marked the first time in six months that the index improved. Still, with austerity measures just starting to kick in, let’s see if this turns out to be a one month anomaly.
Looking ahead, keep an eye out on net lending figures due today at 3:00 am GMT. About 700 million GBP is expected to have been issued last July, up from the 600 million GBP figure given out in June. If the report indicates that lending has dipped in the past month, it may trigger another pound sell-off.
Lastly, do take care my Forex friends, as London traders will coming back in from their long weekend. Who knows if they’ll have a weekend hangover, or if they’ll reposition their positions in light of what happened yesterday.
No thanks bad data from UK and the slight case of risk aversion, the pound bulls had their butts handed to them. Cable fell to its lowest level since July at 1.5328 while Guppy hit a new 3-month low at 128.70.
Yesterday, the lending figures that were released fell below expectations and printed 90 million GBP versus the 700 billion GBP initially expected. The figure given out in June was also revised down to 520 million GBP.
Anyway, enough of the past! It’s a brand new day , so let’s see what reports we have got on the docket today that can affect the pound! According to the economic calendar, we will see the manufacturing PMIfrom UK. Scheduled to come out 4:30 pm GMT, the report is predicted to print a reading of 57.0 for August, which is slightly lower than the 57.3 reading seen the month before. If the actual figure comes in higher-than-forecast, we may see Cable test 1.5400.
Because risk appetite made the market tik-tok yesterday, the pound was able to wake up today feeling like Pip Diddy. Hah! GBPUSD traded higher yesterday after it opened at what would be its intraday low at 1.5334. Awesome! Too bad it wasn’t able to go beyond the psychological handle as it just peaked at 1.5492 before ending the day at 1.5453. But a win is still a win, right?
So I guess the pound looked like Mick Jagger despite UK’s disappointing manufacturing data to enough to convince the bulls not to kick it to the curb. Yesterday, we saw that the manufacturing PMI for August fell to its lowest in nine months! Analysts had been expecting a modest increase to 57.0 from July’s 56.9 reading. Ouch! Maybe traders were just satisfied that it didn’t fall below 50 and implied that the sector is still expanding.
I wonder if there’s enough risk appetite in the market and positive economic reports for the pound to continue its rally up the charts. Let’s see what we have on tap.
At 6:00 am GMT we have Nationwide’s HPI to give us a gauge of how UK’s housing market is doing. Analysts are eying an improvement in the general level of house prices with the forecast for August up at -0.3% from July’s -0.5% reading. We also have the construction PMI at 8:30 am GMT with the consensus slightly lower at 53.2 for August from its 54.1 reading in July. If the figures come in better than expected, we may just see the pound wake up tomorrow feeling as awesome as I am, again!
The markets dropped a lot of pounds yesterday, and no, it has nothing to do with weight issues. The pound bulls lost their appetite when UK printed, not one, but two disappointing pieces of data. The pound found itself down by 55 pips against the dollar at 1.5398 and 73 pips at 129.70 to the yen. EURGBP also soared to its .8327 closing price. Cripes!
The Nationwide house price index might have soured the investor-lovin’ when a simple supply and demand action brought the house prices down by 0.9% in August after dropping by 0.5% last July. The construction PMI, too, failed to put on a good show when the index fell to 52.1 from July’s 54.1 figure.
Maybe the pound can get some of the cheery faces back when UK releases the Halifax house price index today at 8:00 am GMT. Did the Nationwide data set the tone for last month’s housing industry, or will this report beat the odds by printing higher than July’s 0.6% rise?
The PMI for the services industry is also scheduled to hit the spotlight today at 8:30 am GMT. The market groupies pegged the figure at 53.0, but a better-than-expected figure might help the pound get back in good shape.
“I choose you!” The pound bulls went all Pipkémon last Friday and successfully battled it out against the currency bears despite the disappointing services PMI from the UK. The pound lost 12 pips against the euro, but gained 84 pips against the yen at 130.54. GBPUSD also showed muscle after capping the day with a 65-pip win at 1.5463.
Does this mean that the currency bulls are in the “gotta catch ‘em all” mood for the pound? Many analysts don’t think so. Last Friday’s 51.3 figure for the services PMI was the third hit to the UK economy after it followed the less-than-stellar numbers for the manufacturing and construction PMIs. With the services industry making up 70% of UK’s business activities, the buzz of a double-dip recession in the UK is getting louder. Duhn duhn duhn duhn.
Will the economic data this week confirm the market’s fears? The BRC retail sales report will start the week for the UK, and a better-than-expected figure than last July’s 0.5% growth would support the strong retail sales figures released last month.
The Halifax house price index can also rock the charts on Tuesday if it prints worse than the expected 0.3% dip from last July’s 0.6% rise. Meanwhile, the manufacturing production on Wednesday at 8:30 am GMT is expected to remain growing by 0.3% in July.
The climax of the show will be on Thursday when the trade balance report at 8:30 am GMT will be followed by the Bank of England’s interest rate announcement at 11:00 am GMT. Since many believe that the BOE will maintain its current 0.50% interest rate this month, analysts are more excited about the trade balance. The deficit is expected to widen to 7.5 billion GBP in July from its 7.4 billion GBP figure last June.
It’s time to fatten up those pip-ggy banks, so don’t even think of missing these red flags! Happy trading!
Boy did the pound get some poundin’ from the bears yesterday! GBPUSD hustled to its intraday high of 1.5490 only to tumble to 1.5347 before closing the day at 1.5399. Ouch! Against the euro the pound slumped to its six-week low at 0.8391 before settled it at 0.8365 to start the week with a 12-pip loss.
Word on the street is that the weak PMI figures released last week still weighed down on the currency. Some also say that the sell-off was because a big British bank sold its pounds.
Good thing the BRC Retail Sales Monitor somehow provided the pound with a breather when it showed that consumer spending in August was at 1.0% which was double that of July’s 0.5% reading.
I wonder if the pound bulls will be able to stage another rally with today’s reports. Let’s take a look at them, shall we? At 11:00 pm GMT we have the BRC Shop Price Index. If we see the figure for August higher than that of July’s reading which was at an annualized rate of 1.5%, we may just witness the pound hustle once again as this would indicate stronger inflation pressure. Along with that we have the permanent jobs report which came in at 60.2 in July. A better than expected figure will also be bullish for the currency so watch out for that!
Look out below! The pound slipped against most of its major counterparts yesterday on a fresh wave of risk aversion as a Wall Street Journal article questioned the credibility of the European banks and the EU stress tests.
GBPUSD leveled off to a 1.5367 closing price after dropping to an intraday low of 1.5297, but EURGBP ended the day at the pip-deeps at 0.8260.
Tsk tsk. It seems that the markets barely paid attention to the better-than-expected BRC shop price index that clocked in at 1.7% against last July’s 1.5% growth. This could’ve been a booster for the pound since it signaled healthy consumer spending despite the threats of tax increases and unemployment.
Will today’s data be of any help for the pound? The manufacturing production report due 8:30 am GMT is expected to ease to a 0.3% growth after rising by 0.6% last June, but something tells me that the data is in for an unpleasant surprise. I’ll give you a clue – it starts with “manufacturing” and ends with “PMI.”
The National Institute of Economic and Social Research (NIESR) is also set to rock the charts sometime today when it releases its GDP estimate for the second quarter. A better-than-expected reading than last quarter’s 0.9% might wake up the bulls and push the pound higher in the charts.
“I’ve been high, I’ve been low… I’ve been yes and I’ve been oh, hell no” The pound did a Train number yesterday when it rose against its major counterparts after getting beat up for the past few days. GBPUSD capped the day with a 98-pip rise at 1.5465, while EURGBP closed 38 pips below its open price at .8222.
The better-than-expected Halifax house price index might have pulled the pound bulls out of their siesta when it clocked in a 0.2% rise. This sent a shockwave of good vibes to the market geeks who predicted a 0.3% fall in prices after a gloomy reading from last week’s Nationwide house data.
The production data for the month of July also kept the bull rally chugging after the manufacturing production report printed an in-line-with-expectations 0.3% figure, while the month’s industrial production went up by 0.3% after dropping by 0.5% in June.
Lastly, the National Institute of Economic and Social Research (NIESR) estimated that the UK economy grew by 0.7% for the past three months ending in August. This might be a bit cooler than last quarter’s 1.5% estimate, but NIESR also said that the number is good enough for the economy.
Will the data today keep the happy tune for the pound? The trade balance report is scheduled to rock the charts at 8:30 am GMT. The trade deficit for July is expected to widen by 0.1 billion GBP to 7.5 billion GBP, but a worse-than-expected data might signal that the growth weakness around the globe is taking its toll on the UK’s trades.
UK’s Monetary Policy Committee (MPC) is also set to announce its interest rate decision at 11:00 am GMT. Because analysts believe that the MPC will keep rates at 0.50% until 2011 and the inflation target at 2%, the report is expected to trigger be a near snoozefest.
The pound buckled some early intraday hits in yesterdays trading, limiting its potential losses. GBPUSD traded as low as 1.5376, while GBPJPY threatened to test lows at 128.57, but both pairs bounced right back up, managing to close at 1.5437 and 129.39 respectively.
As expected, there was no change from the BOE’s stance on quantitative easing, as they kept rates steady and the asset purchase facility at 200 billion GBP. As it turns out, it turned out to be a non-event, as GBPUSD barely yawned once the news came out.
Instead, the major news to hit the market was the results of the recent trade balance figures. The UK posted a deficit of 8.7 billion GBP, which was much higher than the anticipated 7.5 billion GBP figure. The report showed that while imports have risen slightly, export demand is weakening.
With the UK about to implement austerity measures, some fear that the recent rise of imports cannot continue. This poses a problem for the UK economy, as then both internal and external demand would be weak. I guess the BOE may have no choice but to take a wait-and-see approach eh?
For today, we’ve got the producer price index on deck at 8:30 am GMT. Producers are expected to have paid 0.2% more for their raw materials in the past month. Remember, producers normally pass on any additional costs to consumer to bear the burden. So if producer prices are rising, it would be a sign of rising inflation, which may prompt the BOE to raise interest rates. Now, I’m not too sure that Mervyn King and his buddies are eager to raise rates just yet, but I’m just putting the idea out there…
Right in line with the recent end of summer trend, GBPUSD stayed within a descending channel, as it fell once it touched upon key resistance. After touching a high of 1.5467 last Friday, the pair dropped 109 pips to find itself right smack in the middle of the channel at 1.5358.
Initially, GBPUSD pushed higher to start the day, but found itself struggling once producer prices data was released. The report showed that producer prices (the prices at which they pay for raw materials) fell by 0.5% last August. This was extra disappointing, as early forecasts were calling for a 2.0% rise in prices. This gives less reason for the Bank of England to raise rates in the meantime. Remember, just before the start of summer, rumors were floating around the English channel that the UK might have to deal with a case of hyperinflation.
The consumer price index, which will be released tomorrow at 8:30 am GMT, could give us a clearer picture of what direction UK prices are headed. Experts anticipate that year-on-year inflation has died down to 2.9%, which would inflation right under BOE’s upper target limit of 3.0%.
Could this be the news that busts GBPUSD out of its recent range? If not, well, for all those who want some volatility, I’ve got some good news for you! We’ve got tons of data coming out during the rest of the week!
To kick off the week, we’ve got some medium tier data in the form of the Nationwide consumer confidence index and the RICS housing surveys due at 11:00 pm GMT today. While the consumer confidence index is expected to tick up to 59, up from 56 the prior month, the RICS surveys are expected to reveal that housing prices fell in the past month.
On Wednesday, both employment data (claimant count) and the BOE’s inflation report hearings are due, while on Thursday we’ve got retail sales. I’ll make sure to give you the scoop on these events and how they can affect the fate of the pound! Good luck this week!
“Pick me! Pick me!” Like a wimpy kid in gym class, the pound missed out on the risk rally yesterday because of lingering doubts on the UK economy. GBPUSD gained the least among the major dollar pairs with a 40-pip win at 1.5421. Meanwhile, GBPJPY dropped by 68 pips to its 109.02 closing price, and EURGBP rocketed by 70 pips to close at .8350.
No reports were released from UK yesterday, but last week’s disappointing PPI figures were still fresh on the traders’ minds, and limited the pound’s gains.
Were the markets too pessimistic on the pound? Judging by the data released a few coffee cups ago, they were actually right on the money!
The Nationwide consumer confidence should’ve given the bulls a boost when it printed at 61. This is well above the 56 index figure for August and the expected reading of 59. But the RICS house price balance just had to put a stopper on all the optimism when it dropped by 32%. Uh-oh, that’s a huge leap from the 8% decline last July!
Will the pound bulls get a chance today? The UK data might have woken up on the wrong side of the pip-beds, but the CPI data today at 8:30 am GMT might turn things around. The inflation indicator is expected to cool down to 2.9% from last July’s 3.1%, but any figure below the big 3.0% could give the euro bulls a chance at some pip-locking action.
Monetary Policy Committee member Martin Weale is also scheduled for the hot seat today when he gives his speech in London at 10:00 am GMT. Will he give clues on the MPC’s decisions?
Daaaaaang! Get a load of that long green daily candlestick on GBPUSD! After a bit of ranging earlier in the day, the pair rose to close at 1.5557 and locked in a 135-pip gain for the day.
It looks like the Bank of England (BOE) has got quite a problem on their hands. Inflation has been as sticky as gum in the UK, with the most recent CPI figures posting an annualized increase of 3.1%, the same as that in July.
Analysts were expecting to see inflation soften to 3.0%, but inflation has been very stubborn. In fact, it’s been so stubborn that BOE Governor King will have to write another letter to the Chancellor to explain why inflationary pressures are still strong. If it stays at this pace, the BOE might have no choice but to increase interest rates in the future.
Today, we’ll put the pound to the test! Will it be able to sustain its gains?
The August claimant count change figures are due at 8:30 am GMT. The report is slated to show a decrease of 3,000 in the number of individuals claiming unemployment benefits after July posted a decline of 3,800. As usual, be on the lookout for a downside surprise which may trigger a pound sell-off.
At 10:30 pm GMT, BOE Governor Mervyn King gets under the spotlight as he speaks to the Trades Union Congress. Listen carefully to what he has to say because he might just drop clues about what the BOE plans to do in the future. Markets can be very volatile while King delivers his speech, so be careful out there!
We saw another strong performance from the pound yesterday as it easily trounced the Greenback. In fact, it rose against most of its major counterparts yesterday. In spite of weak economic data, GBPUSD rallied to an intraday high of 1.5652 after opening at 1.5557.
Investors must have had their blinders on, judging by the way they ignored the UK’s negative data.
Jobless claims rose by 2,300 in August instead of falling by 3,000 as expected. Analysts say job cuts in the public sector are making the labor situation more difficult in the UK. I guess this explains why the unemployment rate held steady at 7.8% in July.
Likewise, the average earnings report, which measures the change in wages paid by businesses and the government, printed weaker-than-expected. August’s data revealed a 1.5% uptick, falling short of the forecasted 1.7% increase.
In his speech yesterday, Bank of England Governor King said he doesn’t want to burden consumers even more by making investment and loans more expensive through rate hikes. Instead, he said he plans to slowly cut into the country’s deficit over the next five years. But then again, with inflation seemingly stuck at around 3.1%, it looks like the BOE may have no choice but to raise rates. I can almost hear BOE member Andrew Sentance saying “I told you so!”
Strap on your seatbelts because we could be in for a wild ride today! The UK is scheduled to roll out one of its biggest reports: its retail sales data! The question is whether August can exceed expectations of a 0.3% uptick after July recorded a 1.1% increase. Let’s find out together at 8:30 am GMT!
All for one and one for all! The pound gained against the Fellowship Of The Weak as the bad news from the other economies eclipsed the UK’s disappointing economic data. The pound lost 38 pips to the euro, but gained 10 pips on the dollar, 46 pips on the yen, and a crazy 189 pips on the franc. Can anybody sing “We’re all in this together”?
Those reports from other countries must be really bad for them to overwhelm the bad digits from the UK! The retail sales report couldn’t have showered the currency bulls with happy jellybeans when it printed a 0.5% decline after growing by 0.8% last July. As the first decline since January, the report echoed the investors’ concerns on the UK’s growth problems.
The CBI industrial order expectations also gave shivers to the pound bulls when it sank to new deeps by clocking in at -17 when market geeks pegged the figure at -12 from -14 last August.
No economic report from the UK will chase the growth monsters away today, but keep close tabs on reports from other countries that might the sentiment on the pound. Happy trading, kiddos!
They had been trampling up the charts for the last four days, but pound bulls finally settled down last Friday and allowed the bears to get a bit of action. After hitting an intraday high of 1.5730, GBPUSD finished at 1.5623 to record a 5-pip loss for the day.
The pound treaded new monthly highs against the dollar last Friday, but failed to close at the peak. Perhaps investors were a bit wary about taking GBPUSD to new heights after seeing disappointing economic figures from the UK throughout the week.
Now, to see if the UK can reverse their fortunes and post positive economic data this week!
Starting things off at 8:30 am GMT today is the August preliminary mortgage approvals report. July posted 47,000 new mortgages, but analysts believe August is likely to record just 46,000. Like I always say, stay on your toes! Better-than-expected results can always trigger a bull run!
Tomorrow at 8:30 am GMT, we’ll take a look at the public sector net borrowing data. Don’t be too surprised if you see a large increase in August’s figures. Analysts say borrowing is expected to leap from 3.17 billion GBP to 12.5 billion GBP!
Things get hot on Wednesday as the MPC meeting minutes are scheduled for release. The most recent meeting resulted in 8 votes in favor of retaining interest rates, while Andrew Sentance remained the lone dissenter. It’s interesting to see if he’s making any progress in convincing the rest of the committee that a rate hike is necessary. Let’s see what the MPC had to say at 8:30 am GMT.
Also on Wednesday, the BOE is scheduled to hold its inflation report hearings. I’m itching to watch the BOE Governor and a few MPC members get grilled by the Treasury Committee as they testify on inflation and the UK’s economic outlook!
Has the pound’s bull run finally hit the end of the line? It was yesterday’s biggest loser, failing to conquer the weakened USD as practically every other major currency chalked up wins against the American currency. GBPUSD fell from its opening price of 1.5628 to land at 1.5551 at the end of the day.
It seems like the UK’s negative economic data has finally caught up with the pound. The pound seemed invincible to the bad economic data the UK published last week. But things are definitely looking different now.
The UK picked up where they left off as they printed another set of bad reports to start the week. The Rightmove HPI report released last Sunday showed a monthly decline of 1.1% in house prices following the 1.7% drop last month.
Similarly, the most recent preliminary mortgage approvals figures printed a decline. New mortgages approved for home purchases fell from 47,000 to 45,000 as August failed to meet expectations of 46,000. Together with Sunday’s HPI data, this report prints a pretty bleak picture for the housing market, don’t you think?
Let’s see if buyers will find reason to buy up the pound today as the UK is set to unveil its public sector net borrowing figures. We’re likely to see net borrowing shoot up from 3.17 billion GBP to 12.5 billion GBP in August according to analysts. Tune in at 8:30 am GMT to see how the UK’s national finances are faring.
After looking like it was headed for new lows, GBPUSD buckled poor public sector net borrowing figures to finish with a decent gain for the day. The pair closed over 100 pips above its lows for the day, mainly due to dollar weakness.
The UK government once again disappointed the markets, as it ended up posting a deficit of 15.3 billion GBP last August, slightly more than the expected 12.5 billion GBP figure. Apparently, the bigger deficit can be attributed to higher interest payment costs and weak income tax returns.
In any case, this just highlights how the UK government needs to get it’s act together. Remember, one of their goals is to cut back on its humungous deficit, mostly through austerity measures. If they continue to post rising monthly deficit figures, they might start to lose their credibility from ratings agencies.
On today’s menu, we’ve got the minutes of the latest MPC meeting at 8:30 am GMT. It’ll be interesting to see what was discussed. Did Andrew Sentance finally convince anyone to join him in his quest to RAISE interest rates? Ha! Quite frankly, I’m not too sure about that. After all, there are those who believe that the BOE might follow the Fed’s leading in opening the doors for more quantitative easing later this year! In any case, this report might cause a few sparks here and there, so be careful trading today!
Traders treated the pound like a zombie from Left for Dead, running away from it as fast as they could. As a result, the pound got left in the dust and dropped across the board. EURGBP rose 70 pips to close at .8548 for the day. Meanwhile, GBPJPY dropped for the fifth consecutive day to close at 132.45, down 54 pips from its opening price.
As it turns out, it looks like the BOE has followed the Fed’s lead and is now worried about the state of recovery. The minutes of the last MPC meeting revealed that things aren’t all fine and dandy, as BOE officials now see potential weakness in the service sector.
Meanwhile, when it comes to the outlook on growth, there seems to be disagreement amongst the members, as some believe that the economy is now exposed to more risks, while others think that growth remains right on track. Some even argued that you should have sugar with your tea! And of course, there was Andrew Sentance, who is still trying to make a fashion statement by saying that interest rates should be raised.
Jokes aside, this led to speculation that the BOE may consider more quantitative easing measures down the road. I don’t know how they’ll manage that, especially since they’re supposed to be in austerity mode. It’ll be interesting to see how this all pans out over the next couple of months.
Looking ahead, no biggie-sized meals on the menu for today, with only BBA mortgage approvals report coming out at 8:30 am GMT. It is expected that about 34,000 new mortgages were approved last month. If we see a better than expected result, it may just give the pound the boost it needs to recuperate its losses against other major currencies.
Not too shabby, pound ole boy! Despite disappointing mortgage approval numbers, the pound mustered enough energy to come out on top in its battle against the Greenback. Talk about playing with a handicap! GBPUSD traded sideways for most of the day and ended 10 pips higher at 1.5676.
It didn’t look like the pound was going to do well after the lone report from the UK printed worse than expected. Mortgage approvals climbed by 34,270 in July. But this figure fell to 31,770 in August, failing to meet predictions of an increase of 34,000.
Given the housing market’s slump, this really isn’t too much of a surprise. Think about it. It’s unlikely that mortgage approvals for houses will climb if no one’s out there buying houses in the first place.
The pound found a bit of support thanks to former MPC member Kate Barker. In an interview yesterday, she said that high inflationary pressures in the UK may make the BOE less certain about taking on more stimulus measures.
With no reports on the economic docket today, you ought to get a feel for risk sentiment. And be all ears in case any more officials from the UK decide to speak up!
The pound kicked it like Adidas last Friday as it tapped its 6-week high against the dollar at 1.5844. It ended the day a tad bit lower at 1.5828 with a 152-pip win to add. It was also able to bag 117 pips versus the yen to close GBPJPY at 133.38. Unfortunately, the pound’s magic wasn’t enough to sweep a win against the euro as EURGBP ended Friday 28 pips higher at 0.8524.
No economic data was released from UK last Friday so I’m wondering how Nationwide’s report will affect the pound's run up the charts in today’s trading. Analysts are expecting to see a softer decline of 0.2% in house prices in August relative to its 0.9% fall in July. If the figure comes in better than expected, we may just see the pound stack up its gains against its counterparts. Whoohoo!
Tomorrow we have the final GDP report to tune in to at 8:30 am GMT. It is expected to show no revision from its initial reading and reveal a 1.2% growth rate during the second quarter. If you’re planning to go long on the pound, you better keep your fingers crossed for a better-than-expected figure on this report.
That’s all folks! Remember to also be on your toes for details about the Fed Reserve’s asset purchase program. Since it seems like the market sentiment is dollar-aversion, a dovish tone from the US central bank may be bullish for the pound. Good luck!