Though GBP/USD finally got a breather from its slide yesterday, the pound continued its losses against its other counterparts. GBP/JPY closed 39 pips down at 123.49, while EUR/GBP rose to .8824. What happened?
As it turned out, economic data from the U.K. was the culprit… again. Data released yesterday revealed a 1.2% decrease in August’s Halifax house price index from its 0.2% increase in July, while the country’s manufacturing production clocked in a 0.1% growth as markets had expected. Industrial production also slipped by 0.2% in July after stagnating in June. Lastly, the NIESR GDP estimate for August only printed at 0.2% after showing a 0.6% growth estimate for July. Tsk tsk.
Will the pound have a chance at recovering its losses today? Only the MPC is scheduled to rock the airwaves today with its interest rate decision. After showing a solid dove camp in its last meeting minutes, markets aren’t expecting changes in the MPC’s 0.50% interest rate and its 200 billion GBP asset purchases program. Still, keep your eyes peeled for any surprises!
Mixed results for the pound yesterday as it pummeled the euro but failed to gain against the dollar. EUR/GBP dropped 130 pips to close just below the .8700 handle, while GBP/USD closed 9 pips lower at 1.5970, after trading as high as 1.6084 midway through the New York session.
As expected, the boys over at the Bank of England didn’t announce any changes to their monetary policy, sticking with the current rate of 0.50% and keeping the central bank’s asset purchase facility at 200 billion GBP.
Looking ahead though, there are those who believe that the BOE will crack and add additional stimulus measures to avoid a double dip recession. We’ll know more when the minutes of the last meeting are released on September 21. I’ll keep you posted on any developments!
For today, we’ve got producer price input data coming in at 8:30 am GMT. Expectations are that companies are paying 1.6% less for their raw materials, which would indicate that price pressures are dying down. This could give the BOE more leeway for more quantitative easing measures, so make sure you keep an eye on this report.
Reeeeeepeeeat! Just as it did on Thursday, the pound strengthened against the euro but ended the day lower against the dollar. While euro weakness led EUR/GBP 95 pips lower to .8603, GBP/USD slid 89 pips to 1.5881. Will the pound record a threepeat today?
A bit of good news for the BOE last Thursday. It seems as though inflationary pressures are easing in the U.K.! The PPI input report, which measures the prices of goods and materials used by producers, slipped 1.9% last month, instead of falling 1.6% as predicted.
This comes as good news for two main reasons. First, it means that manufacturers spent less on production costs last month than they did in July. Ka-ching! And second, it gives the BOE more leeway in loosening monetary policy should it decide to add more stimulus in the future.
Today, we only have a couple of tier 2 reports on deck. The Nationwide consumer confidence report is due for release. What we should all be watching for is if the index will record an improvement on its previous reading of 49. Also, we have the RICS house price balance report coming out today. Look for a repeat of the previous month’s 22% decline.
Later in the week, we’ll have heavier reports on our plates. Tomorrow, we have the U.K. monthly CPI report, which almost guarantees plenty of action. On Wednesday, we have U.K. employment data on tap. And last but not least, on Thursday, U.K. retails sales data will available. These reports have all been market-movers in that past, so if you’re into trading the news, don’t miss them!
Cable moved sideways yesterday but managed to end 20 pips up from its 1.5845 open price. Guppy, on the other hand, chalked up a tiny 2-pip loss to close at 122.58. With a bunch of U.K. economic data on deck today, will the pound pairs be in for bigger moves?
The U.K. didn’t release any top-tier reports yesterday, which explains why pound pairs moved sideways. Fresh off the press is the RICS house price balance, which showed that 23% of surveyors reported house price declines in their areas, slightly worse than the expected 22%.
Today, the U.K. is set to release a bunch of reports so better brace yourselves! First up, the CPI report is due 8:30 am GMT and could show that annual inflation climbed to 4.5% in August. This would be a notch higher than the 4.4% year-over-year inflation seen last July and way above the BOE’s inflation target. A higher than expected reading could increase the odds of a rate hike from the central bank, which could provide support for the pound.
The U.K. trade balance is also set for release at 8:30 am GMT today. This report could show that the deficit narrowed from 8.9 billion GBP to 8.5 billion GBP in July, suggesting that exports strengthened during the month. Bear in mind, however, that three out of the last four releases came in worse than expected. A weak figure could show that the U.K. trade industry isn’t performing as strong as projected, which could be bearish for the pound.
Last but not least, stay tuned to MPC member Adam Posen’s speech at 11:00 pm GMT. As a monetary policy committee member, Posen’s economic outlook has an impact on the central bank’s future policy decisions. Hawkish remarks from Posen’s speech could help lift the pound in today’s trading so keep your eyes and ears peeled!
Here we go again! The pound returned to the losing side of the street despite seeing a rise in U.K. inflation. Amid the release of U.K. CPI and trade balance data, Cable finished the day 72 pips lower at 1.5791.
According to the most recent CPI report, inflation rose from 4.4% to 4.5% last month, just as expected! Forecasts were right on target when they predicted that the index would record its second increase in a row after falling to an 8-month low of 4.2%. However, it seems as though the markets largely ignored this increase as the pound was still sold off yesterday. What the heck is going on?!
One possible explanation is that many have come to believe that inflation has become irrelevant to the U.K.’s monetary policy as more and more are calling for further stimulus to shore the economy. As a matter of fact, MPC member Posen recently reminded us that the central bank may need to expand its bond-purchase program to shore up its economy.
It was also noted yesterday that the U.K. trade deficit hadn’t narrowed as predicted. It remained at 8.9 billion GBP instead of shrinking to 8.5 billion GBP in July.
Will we see a shift in sentiment for the pound today? We might… that is, if today’s employment data comes out stronger than expected!
Forecasts have the claimant count change report showing an increase of 34,800 in August, down from 37,100 in July. However, this isn’t expected to move the unemployment rate, which is anticipated to remain at 7.9%. These reports have been major market-movers in the past, so if it’s volatility you want, be sure to catch them at 8:30 am GMT!
Even with the release of slightly better-than-expected employment figures, pound pairs failed to get on their feet yesterday. GBP/USD closed 12 pips lower at 1.5778, but not before hitting as low as 1.5707 midway through the London session. Meanwhile, GBP/JPY dropped 45 pips to finish at 120.94.
While the unemployment rate remained steady at 7.9%, the claimant count change report showed that only 20,300 more people signed up for unemployment claims last month. This was way better than the anticipated 34,800 figure.
In addition, earnings are on the rise as well, as employers paid their employees 2.8% more last July. Not only was this higher than the projected growth of 2.7%, but it also marked the third consecutive month that wages grew more than expected.
Despite the green figures, we have to take a look at the bigger picture and quite frankly, not everything is looking as beautiful as my bald dome. The labor market is weak and with the government expected to lay off more employees, it’ll be up to the private sector to pick up the slack. If we see continued weakness in the labor market, it would give the BOE more reason to implement another round of quantitative easing measures.
We could be in for some wild moves today, as U.K. retail sales are on deck at 8:30 am GMT. Word is that sales growth dropped by 0.2% last August. Take note that this report has proven to be a market mover in the past, so if you’re the type who loves trading the news, this might be your chance to grab some pips!
The pound inched higher during yesterday’s trading as retail sales data fell in line with forecasts. After dipping down to an intraday low of 1.5731, GBP/USD rallied to 1.5869 but eventually settled at 1.5797 for a 19-pip gain on the day. Will it close the week on a high note?
You’ve got to give it up to these economic fortunetellers. They were right on the money in predicting that retail sales would drop 0.2% in August following the 0.2% uptick in July! Apparently, the London riots that took place last month didn’t have that big an impact on retail sales. Yeah, it’s sort of relieving to hear that, but really, it’s nothing to celebrate. After all, the annualized pace of retail sales growth has fallen from 0.2% to 0.0.%.
No more U.K. reports up ahead. In the meantime, be sure to watch pound price action slowly. Lately, it has been bogged down by speculation that the BOE may adopt further quantitative easing. Heck, even MPC members themselves have been calling for more stimulus! As such, unless risk sentiment improves, it’s possible that we could see the pound continue to underperform in the next few days. Good luck, fellas! Let’s finish this week strong!
After last week’s price action led to GBP/USD trading within a range of just over 100 pips, could we be in for an breakout soon? Read on to find out whether or not there is any economic data lined up that could bust GBP/USD out of its recent consolidation!
First up on the economic calendar is the Nationwide consumer confidence index, which is set to come out any time tomorrow. Take note that the index has been printing lower scores for the past two months, so don’t be surprised if see a figure below last month’s reading of 49.0. Make sure to keep an eye out for the trend of this report, as continued weakness could signal declining consumer sentiment.
The biggest mover for pound pairs this week should be the minutes of the latest MPC meeting. The pound has come under some selling pressure the past couple of weeks due to speculation that the Bank of England may be ready to inject more liquidity into the economy. If there is any indication that some members brought up the possibility at the latest meeting, pound pairs may come under some selling pressure when the minutes are released on Wednesday.
For now, take note that GBP/USD has gapped down over the weekend. Some say that gaps always fill, but the biggest problem is, you just don’t know when!
In any case, good luck trading today and make some pips!
Boy did the market shed pounds yesterday! GBP/USD bounced from support at 1.5700 just before the London session opened only to plunge all the way down to its 8-month low at 1.5633. By the day’s close, the pair was back at 1.5700, down 58 pips from its opening price.
Aside from the BOE’s Quarterly Bulletin, our forex calendar was blank for reports from the U.K. Too bad for pound bulls, the report showed that analysts are thinking about the benefits of quantitative easing (QE).
The report doesn’t usually have a significant impact on the currency as it is not prepared by BOE Governor Mervyn King and the rest of the policymakers at the central bank. However, talks of providing the economy with more stimulus was enough to make investors jittery.
With that said, make sure you’re on your toes for the release of the minutes of the most recent BOE MPC meeting tomorrow because I’m pretty sure the report would affect the pound’s fate on the charts. It’s scheduled at 8:30 am GMT and if investors’ fears are confirmed that the central bank is willing to launch more QE, we may just get the pound sold-off!
With no biggies coming out from the U.K., pound pairs stayed in range, failing to make any new significant highs or lows. GBP/USD managed to close 30 pips higher at 1.5730, while GBP/JPY ended the day right smack at its opening price of 120.15.
With the economic calendar as bare as the dome on top of my head, pound traders didn’t really see much action. Even the release of the Nationwide consumer confidence index earlier today (which printed a score of 48) failed to move the markets as it was pretty much in line with expectations.
That could all change later today though, as we’ve got some top tier data coming our way in the form of the BOE meeting minutes and public sector net borrowing figures due at 8:30 am GMT.
Government spending is seen to have posted a deficit of 11.3 billion GBP last August, which would be a complete reversal of the 2 billion GBP surplus we saw in June. However, I think most people will be paying attention to the BOE minutes and may overlook this report.
We’ve seen some weakness in the U.K. economy as of late, so everyone will be watching to see if any MPC members have hopped on the quantitative easing bandwagon. Currently, Adam Posen is riding shotgun and has suggested increasing the central bank’s asset purchase facility to 250 billion GBP. If it appears that others have joined his cause, we may see a strong pound sell-off.
Ka-pow! The pound got knocked down the charts yesterday as the BOE minutes revealed the bank’s eagerness to stimulate economic growth. After consolidating around its opening price of 1.5730, GBP/USD plunged all the way its closing price of 1.5519.
According to the minutes of the most recent meeting, none of the other policymakers sided with MPC member Posen in voting for immediately providing the economy with more QE. However, it also revealed that central bankers came up with ways to spark growth. That was enough to send jitters down investors’ spine that it might not be long until the BOE pulls the trigger on QE. There are even a few market junkies who say that we might just see the bank make a move as early as next month by increasing its asset purchase facility!
To make things even worse for the pound, the public sector net borrowing report for August exceeded the 11.3 billion GBP forecast when it printed at 13.2 billion GBP.
Now that the pound is already chilling at its 8-month lows, how long will it be until the bears get tired?
Maybe if the CBI Industrial Order Expectations report for September comes in better than expected, the pound can get a breather from the bears. So watch out! Keep in mind that analysts are anticipating it to come in at -5.
It seems that the pound still doesn’t have enough strength to recover. After its huge drop on Wednesday, the pound once again gave up a lot of ground in yesterday’s trading session. It closed the U.S. trading session at 1.5359 versus the dollar, a whopping 156 pips lower from its opening price that day.
The pound’s demise came mostly from the growing global growth worries. For one, China and Europe’s PMI reports came in weaker than expected. Both came in below the 50, indicating that businesses are in contraction mode.
In addition, the International Monetary Fund’s new director, Christine Lagarde, said in an interview that there were a lot of downside risks surrounding the global economy.
And finally, the CBI distributive trades survey from the U.K. came in at -9, significantly lower than the -5 initially expected.
Today, U.K.'s forex calendar only contains the BBA Mortgage Approvals report. The report usually doesn’t have a strong impact on price action, but paying attention to the results wouldn’t hurt! With the huge losses the pound has incurred this past two days, a better-than-expected figure could prop the pound at least a little bit!
Touchdown! Just like the Buffalo Bills’ surprising win over the New England Patriots, the pound pulled off an upset against the dollar during Friday’s trading too! GBP/USD traded higher on the last trading day of the week, closing 131 pips above the day open at 1.5489.
But wait! Don’t get too excited rooting for the pound just yet. According to some market junkies, the pound’s win was most probably nothing more than a pullback. Given that we haven’t really heard any good news about the global economy, these naysayers might just be right!
The BBA mortgage approvals report might have helped the pound end the week with a win though. Data showed that there were 35,200 new mortgages approved in August and topped the consensus which was for an increase of 33,
Our [forex calendar](http://www.babypips.com/tools/forex-calendar/) doesn’t have any top-tier data from the [U.K.](http://www.babypips.com/school/united_kingdom.html) listed for this week except for the Nationwide HPI which is due tomorrow. With that said, make sure you keep an ear out for updates regarding the BOE’s plans of increasing its asset purchase facility as this issue would probably continue to weigh down on the currency.
If you’ve been following Huck, you probably know that discussions about providing the economy with more stimulus was one of the reasons why the pound got sold off last week and allowed her to end her GBP/USD trade with a win. So keep tabs on MPCmember Broadbent’s speech later at 8:30 am GMT!
And the pound continues its relief rally! For the second straight day, the pound was able to end the day with a win versus the dollar due to the market’s profit-taking activities. GBP/USD closed the U.S. trading session at 1.5559, 74 pips higher from its opening price during the Asian session.
Now now folks, don’t sharpen your bull horns just yet. Despite the pair’s run up, the outlook remains blink, which means risk aversion could make a comeback any time! This move up we’re seeing could just be a really strong retracement!
No important piece of data was released yesterday, but today we’ll be seeing the CBI distributive trades survey at 10:00 am GMT. The survey measures whether sales volume grew or declined for the given month. A positive reading indicates sales volume increased, while a negative reading means otherwise. For this month, the expected figure is -14.
Whoever said that good luck comes in threes should’ve bet on the pound yesterday! Despite the release of weak economic report from the U.K., the pound managed to end the day in the green against its major counterparts…for the third day in a row! What the heck happened?
GBP/USD tipped an intraday high of 1.5706 before capping the day with a 95-pip gain, while GBP/JPY also registered a 103-pip rise at 120.01. Apparently, the weaker-than-expected realized sales report from the Confederation of British Industry wasn’t enough to rain on the currency bulls’ parade yesterday.
The CBI realized sales report showed a decrease to a -15 reading in September, which is not only lower than August’s -14 reading, but is also the fifth consecutive decline for the report.
Good thing risk appetite saved the day! The increasing possibility of a solution to the Greek debt crisis supported high-yielding currencies yesterday.
Will the pound go for four today? Only the quarterly BOE credit conditions survey is due for release today, so make sure you keep your eyes peeled for any news that might affect risk sentiment!
After three whole straight days of gains, the pound faltered in yesterday’s trading session as risk aversion managed to make its way back to the foreign exchange market. As usual, the heightened case of risk aversion was the uncertainty in Europe. GBP/USD ended the U.S. trading session at 1.5576, 54 pips lower from its opening price during the Asian session.
The sell-off seemed to be triggered by the market’s cautiousness ahead of the German EFSF vote rather a single news event. In addition, the mood was also dampened by a report by Bank of America saying that China’s economy could possibly experience a hard fall.
The first one is the Nationwide House Price Index. The report, which will print at 6:00 am GMT, is slated to show a 0.1% gain, opposite the 0.6% decline seen the previous month.
The second report, which is the net lending to individuals, will be published at 8:30 am GMT. Net lending to individuals is expected to have decreased to 800 million GBP this month from 900 million GBP in September.
Both reports tend to have a significant impact on the pound, so a better-than-expected figures could help the pound recuperate its losses from yesterday.
Despite mixed economic feedback, the pound was able to chalk up decent gains against its safe haven counterparts. While GBP/USD ended the day 40 pips higher at 1.5616, GBP/JPY finished 63 pips higher at 119.89. Will it end the week on a high note or will it give back its recent gains?
You’ve got to give it up for the pound. It started its rally early in the day even though the Nationwide HPI report wasn’t exactly bullish. According to September’s stats, house prices barely moved as they ticked up by only 0.1%. Following the big 0.6% drop last month, you can see that it’s not much of an improvement, even though this figure came in line with expectations. This confirms that the housing market in the U.K., which has been bogged down by weak consumer confidence, continues to suffer.
On a more positive note, borrowing seems to have picked up a bit, which is a relief considering the slump it has been in lately. Net lending to individuals came in at 1.0 billion GBP to best forecasts which called for 0.8 billion GBP. At the same time, mortgage approvals recorded a new 20-month high as it came in at 52,000 instead of the anticipated 50,000 figure. Not bad at all!
It seems like the positive vibes have spilled over from yesterday. Even the GfK consumer confidence report managed to outperform forecasts! The index printed a reading of -30 instead of -33, suggesting that our homies up in the U.K. are feeling a little bit more hopeful for the economy.
That’s all for today, fellas! In the meantime, be sure to monitor risk sentiment. Remember, risk appetite usually helps the pound!
Despite the lack of economic data from the U.K. last Friday, the pound was able to keep its losses at a minimum, compared to the other higher-yielding currencies. GBP/USD fell by 25 pips from its 1.5616 open price while GBP/JPY even ended in the green. How will it perform this week?
The U.K. is set to release its manufacturing PMI at 8:30 am GMT today and this report could show that manufacturing conditions still haven’t improved in the country. The index is projected to dip from 49.0 to 48.9 for September, implying that the industry contracted during the month. If that happens, it would mark the index’s eighth straight monthly decline. But if the PMI manages to end its negative streak, pound pairs could get a bit of a boost.
On Tuesday, the U.K. will release its construction PMI, which is also expected to show a decline. Unlike the manufacturing PMI though, the construction index is still estimated to stay above the 50.0 mark, signaling that the industry is expanding. Similarly, the services PMI due on Wednesday could post a slight dip but stay within the expansionary levels.
After the PMI releases, the U.K.'s main event will take place on Thursday as the BOE gears up to release their monetary policy statement. The central bank is expected to keep rates on hold at 0.5% and make no changes to their asset purchase facility, but y’all better stay tuned to the accompanying remarks. Recall that the MPC members were already considering additional stimulus during their previous monetary policy meeting and data from the U.K. has gotten worse since then. If the policymakers retain their dovish stance, the pound could resume its drop so keep your eyes and ears peeled!
Before the week comes to a close, the U.K. will release its PPI report on Friday. The report could show a 1.4% rebound in producer input prices for September after printing a 1.9% decline last August.
No thanks to risk aversion, the pound fell against its major counterparts despite a positive report from the U.K. The pound lost 142 pips against the yen and 100 pips against the Greenback, but it also gained 34 pips on the euro.
Just when we thought that the U.K. economy is heading south, the manufacturing PMI came in at a 51.1 reading in September, which not only exceeds August’s 49.4 reading, but also pulls back the data to expansionary territory.
Too bad the positive report wasn’t enough to tempt the currency bulls! At least not when concerns on the euro zone continue to dominate market sentiment anyway.
Let’s see if the pound will gain any ground with today’s economic reports. At 8:30 am GMT we’ll get hold of the U.K.’s construction PMI, followed by the BRC shop price index at 11:01 pm GMT. If the reports come in better than analyst estimates, then we might see the pound pare back some of its losses against its counterparts…or not. In any case, make sure you stick around to trade these reports!
It was a mixed day for the pound yesterday as it ended the day higher against the Japanese yen but lost ground to the U.S. dollar and the euro. GBP/USD dipped to a low of 1.5341 but pulled up to close at 1.5437 while GBP/JPY ended 32 pips up from its 118.41 open price. Will it find a clearer direction today?
The U.K. released a weaker-than-expected construction PMI yesterday as the index fell from 52.6 to 50.1 in September. That’s its lowest reading so far this year! Components of the index revealed that the drop in new orders led the decline. Although the reading was still above 50.0 which indicates industry expansion, it’s just one notch above that level, suggesting that the construction sector is dangerously close to contracting.
However, when Fed head Bernanke delivered his speech during the U.S. session, the pound was able to recoup some of its intraday losses against the Greenback. You don’t want to miss out on Big Ben’s remarks on the U.S. economy and future monetary policy so y’all better read my U.S. daily economic commentary as well!
Today, the U.K. is set to release a couple of top-tier data, so brace yourselves. First up is the services PMI which could show a drop from 51.1 to 50.6. If the actual data due 8:30 am GMT disappoints just like the construction PMI did, the pound could be forced to resume its drop. Also due 8:30 am GMT is the final GDP reading for the second quarter of 2011. Any downward revisions could be negative for the pound but an upward revision could provide support for the currency.