It was a day of mixed results for the pound. GBP/USD swung to as low as 1.5916, then popped up to 1.6048, only to end the day right where it started at 1.5949. On the other hand, GBP/JPY slid gently and steadily down from its opening price of 125.00 to close at 124.48. Will it show more consistent results today?
As positive as the construction PMI was, it wasn’t enough to give the pound a win against its safe haven counterparts. The index showed a healthy reading of 53.9 last month, beating forecasts which called for a repeat of September’s reading of 50.1. With the markets operating in a risk-off environment, the upbeat data did nothing more than to spark a mini rally. Bummer!
Today, we’ve got more U.K. data on tap so you’d better stay alert if you plan on trading the news.
The U.K. services PMI is due at 9:30 am GMT and economic fortunetellers say that it’ll probably tick down from 52.9 to 51.9. We’ve seen big moves take place after the release of this report in the past, so I wouldn’t miss it if I were you!
If the report prints better than expected figures, it could spark another rally in the pound. But remember to keep risk sentiment in check, kids! If traders stay risk averse, it could limit the upside potential for pound pairs, and the pound may ultimately end up weaker regardless of the report’s results.
Victooory! After losing to the dollar for two days straight, the pound finally gathered enough strength to end the day with a win despite disappointing data. GBP/USD rallied from its intraday low of 1.5877 all the way up to its closing price of 1.6042, 93 pips above its opening price.
Yesterday we saw that the services PMI was lower at 51.3 in October than its previous reading at 52.9 and missed the forecast at 51.9. Digging deeper into the report, I found out that concerns about the economic outlook and a drop in new orders dragged the index to its 10-month low. Yikes!
But it was all good for the pound bulls yesterday as risk appetite picked up following the news that Greece canceled its plans for a referendum.
With that said and given that our forex calendar is blank for reports from the U.K., it might be a good idea to keep tabs on market sentiment. Hmmm, I wonder if there are enough good vibes left in the market to fuel the pound’s rally in today’s trading. Be on your toes for updates on the G20 meeting and make sure you don’t miss the much-anticipated NFP report, ayt?
When there’s a will, there’s a way. After dipping as low as 1.5946 early on during the European trading session, the Cable bulls managed to man up and recover all of its losses once the U.S. trading session began. By the end of the day, Cable was sitting at 1.6034, just 8 pips lower from its opening price.
If it wasn’t for the U.S. non-farm payrolls, the pair wouldn’t have seen any volatility at all. The U.S. non-farm payrolls came out worse than expected (80,000 actual vs. 97,000 forecast), which resulted in a huge bout of risk aversion at first. Risk aversion didn’t last long though, as the market totally reversed its dollar-buying ways a few hours after the figures had sunk in.
This week, we’ve got a couple of red flags on the U.K.'s economic calendar, starting with the Halifax House Price Index at 8:00 am GMT today. The Halifax HPI is slated to show a 0.1% increase, opposite the 0.5% decline seen the previous month.
Tomorrow, at 9:30 am GMT, the Manufacturing Production report will come out. The market expects the report to show a 0.2% increase. If forecast holds, it will be a welcome improvement from last month’s 0.3% decrease.
And finally, on Thursday, the Bank of England (BOE) will meet to set the country’s benchmark interest rates. Since the BOE already made a move and surprised the market with a 75 billion GBP stimulus package last month, I don’t think we’ll be seeing any changes this time around. What we’ll hear instead is a more conservative tone as the central bank examines the effects of their program.
Alright! That’s it for the U.K. There are a lot of economic events scheduled to happen, so be careful!
Even with the release of positive data, the pound didn’t make much headway versus the dollar in yesterday’s trading. GBP/USD traded within a range of just 100 pips, closing at 1.6053, up just 14 pips on the day.
The Halifax index showed that housing prices rose by 1.2% in October, which was a nice reversal of the -0.5% fall we saw the month before. This was also higher than the anticipated the 0.1% jump. Still, traders didn’t pay much attention to the news, as Cable traded within a tighter-than-usual range.
For today, we’ve got more top tier data coming out in the form of manufacturing production figures at 9:30 am GMT. Word through the grapevine is that production rose by 0.2% in September, which would be a decent increase seeing as how it fell by 0.3% in August. Take note that this report sometimes leads to extended moves in pound pairs, so watch out for it!
Aside from that, make sure you keep an eye out for any developments in Italy and Greece. We’ve been hearing rumblings of political instability from the two euro zone members. Word is that Berlusconi may actually be forced out andthis could prove to be a major mover and shaker in the markets. Make sure you’ve got your dancing shoes on as we could be in for some wild trading today!
Pound bulls made a dash for their cash despite worse-than-expected reports. GBP/USD traded higher on the charts yesterday, after dipping to a low of 1.6036. The pair then tapped its two month high at 1.6131 before closing with a 51-pip gain at 1.6104.
Let’s go through the roster of economic reports we had, shall we?
The BRC retail sales monitor showed that sales declined in October by 0.6% after growing by 0.3% in the previous month. Meanwhile, the RICS house price balance report for October disappointed expectations when it printed at -24%. Analysts were expecting to see that the drop in house prices would be equal to the-23% decline we saw in September. It was also reported that industrial production was flat in September, falling short of the 0.1% forecast.
On the slightly positive side of things, manufacturing production grew by 0.2% in September, coming in just as expected. Meanwhile, the NIESR GDP estimate for October clocked in at 0.5% and matched its previous reading.
Luckily for the pound bulls, risk appetite picked up during yesterday’s trading on news that Prime Minister Berlusconi will resign soon. With that in mind, be sure to keep tabs on news coming from the euro zone that could shift market sentiment.
Also, don’t miss the trade balance report for September which is due to be released later at 9:30 am GMT. It is anticipated that the trade deficit grew 8 billion GBP during the month from 7.8 billion GBP in August. A better- than-expected figure may just spur the pound to another rally, so watch out!
The pound suffered yesterday as the weight of risk aversion was just too heavy for the markets. GBP/USD dropped 167 pips to close at 1.5927, while GBP/JPY closed at 123.96, down 116 pips on the day.
The pound’s demise had more to do with overall risk sentiment, as Italian bond yields soared to 7%, prompting fears that Italy would need a bailout as well. This sent the markets into risk aversion mode and everyone started shedding pounds.
Trade balance data didn’t help either, as a deficit of 9.8 billion GBP was posted for September. This was more than expected deficit of 8 billion GBP. This indicates that more goods were imported than exported, which means that demand for U.K. products was lower than anticipated.
For today, we’ve got the Bank of England interest rate decision at 12:00 pm GMT. After expanding its asset purchase facility last month, expectations are that we won’t be seeing any surprises today. The accompanying statement has proven to be a mover in the markets, so it would be wise to be a little more cautious when the decision is released. Also, my boy Forex Gump wrote a BOE interest rate decision preview, so you might wanna check that out!
Whoa! It seems like price action on GBP/USD during yesterday’s trading was as intense as my Zumba class. The pair opened at 1.5927, rallied to a high of 1.5986, before falling to a low of 1.5869. Then towards the end of the day, it bounced back up to end the day at its opening price.
The BOE didn’t have any surprise up its sleeves in its interest rate statement yesterday. As expected, BOE Governor Mervyn King didn’t announce any rate hike and the asset purchase facility remained at 275 billion GBP.
Perhaps central bankers at the U.K. are still waiting for more economic data to help them decide whether or not they should engage in more stimulus soon. And you should too! Start with the PPI reports for October later. Due to be released at 9:30 am GMT, the PPI input index is anticipated to come in flat for the month. Be on your toes for a worse-than-expected figure as this would imply that inflationary pressures are easing and would give the BOE more leeway to engage in further monetary policy easing.
Anyway, it’s also noteworthy to cite that considering the downward revisions which the European Commission made to its growth forecasts for the U.K., the pound was pretty resilient on the charts yesterday. Initially, GDP for 2011 was expected to come in at 1.1%. But now, they eye growth to print at 0.7% as the economy remains vulnerable to the euro zone crisis. Heck, they say it may even end up in another recession if the sovereign crisis isn’t resolved soon!
With that said, be sure you keep an ear out for updates from the euro zone. Who knows, the pound may not be so lucky to escape any more pessimistic talks about the U.K.'s vulnerability to the debt crisis.
Market sentiment was clearly much more positive last Friday as political instability in the euro zone area continue to ease. This gave risk appetite a chance to return to the markets, which helped the pound rally across the board. GBP/USD, for instance, closed the day with a significant 151-pip gain.
In Greece, political parties have banded together behind an interim unity government to solve the country’s debt crisis. In Italy, new stricter austerity measures have finally been approved.
The only bad news that came out from the U.K. last Friday was the weaker-than-expected Producer Price Index for both input and output prices. The input version came in at -0.8% versus the 0.0% expected and the output version stood at 0.0% versus the 0.2% gain forecast.
This week, the U.K. economic calendar has a lot to offer us.
Tomorrow, at 9:30 am GMT, inflation figures will be published. The market is expecting the CPI to fall to 5.1% from 5.2%.
Then, on Wednesday, the Claimant Count Change, along with other labor market data, will be released. The Claimant Count Change is predicted to show that 20,800 people claimed for jobless benefits last month while the unemployment rate is slated to rise to 8.2% from 8.1%.
Last on the list is the U.K.'s retail sales report. The consensus is a 0.3% decline in sales, opposite the 0.6% increase seen the previous month.
Uh-oh. It looks like the pound is off to a bad start. It fell like a rock against the dollar as soon as it opened at 1.6087. GBP/USD ended the day back to the bottom of the range that Big Pippin pointed out in his Daily Chart Art yesterday at 1.5903.
Without any economic data on tap, the pound fell victim to market sentiment as uncertainty continued to grow in the euro zone. (Check out my EUR commentary for more details.) But don’t worry! Today we have the much-anticipated U.K. inflation report to help us gauge which direction the pound is headed on the charts.
At 9:30 am GMT, the headline CPI report for October is anticipated to ease to 5.1% after printing its all-time high in September at 5.2%. Excluding volatile items, the core CPI is eyed to match its previous reading of 3.3%. A better-than-expected figure may just be enough reason for the BOE to be not too aggressive in providing the economy with further stimulus.
Make sure you don’t miss the report, ayt?
After days and days of trying, the bears finally managed to break the range and push Cable under the 1.5900 major psychological level. Cable ended the U.S. trading session at 1.5816, almost 100 pips lower from its opening price during the Asian session.
The bout of risk aversion during the day came from euro zone sovereign debt woes and the new political problems that new Italian PM Mario Monti faced. In the euro zone, Italian 10-year bond yields traded above the 7.0% handle again while in Italy, PMI Monti was reported to have a have a difficult time forming his own cabinet.
Data from the U.K. also added to the bearish momentum. The U.K.’s consumer price index came in at 5.0%, lower than the 5.1% initially predicted. Meanwhile, the retail price index printed a 5.4% figure versus the 5.5% expected.
Today will be another big day for the Cable as a bunch of high profile economic events are scheduled to happen. At 9:30 am GMT, some labor data will be released. The Claimant Count Change, which measures the change in the number of people who claim jobless benefits, is expected to show an increase of 20,400. The country’s unemployment rate is predicted to rise to 8.2% from 8.1%.
An hour after the release of the U.K.’s labor data, BOE Governor Mervyn King will testify in front of the parliamentary to discuss the high rate of inflation. Pay special attention to his testimony as he could provide some clues on the central bank’s future monetary policy moves.
The pound bears partied for another day yesterday as risk aversion in the markets got mixed in with the U.K’s weak economic data. GBP/USD capped the day with a 79-pip loss at 1.5738, while Guppy also took a 76-pip hit at 121.19.
With the U.K. officials signaling weaker economic growth, who could blame the currency bears from attacking? In his speech yesterday, BOE Governor Mervyn King relayed his concerns on the problems in the euro zone economy. He suggested that while the U.K. is struggling with its own economic problems, the central bank is also gearing up to protect the local economy from the possibility of debt contagion in the euro region.
Of course, it didn’t help the pound bulls that employment reports in the U.K. printed weaker-than-expected. Claimants for unemployment benefits might have only climbed by 5,300 in September against expectations of a 21,000 rise, but the unemployment rate also rose to 8.3%, a 15-year high for the report. Uh-oh.
Will the U.K.’s economic reports give the pound some support today? A couple of dumbbell reps ago we saw the Nationwide consumer confidence report drop to a 36 index reading in October, which is not only lower than September’s reading of 45, but is also an all time low for the data.
Let’s hope that the U.K.’s retail sales report at 9:30 am GMT will turn the currency bulls’ frowns into smiles! The data is expected to show a 0.2% decrease in October after rising by 0.6% in September, but keep your eyes peeled for any surprises!
The pound gave traders a wild ride yesterday as it dipped and swerved like a buckin’ bronco. After GBP/USD tapped 1.5700 early in the day, it rose choppily to the 1.5800 handle, eventually settling at 1.5757 to post a 19-pip gain for the day. Meanwhile, GBP/JPY closed just 7 pips higher at 121.26 after falling to as low as 120.90 and climbing to as high as 121.70.
It seems the pound was able to escape with narrow victories yesterday. As a matter of fact, if it weren’t for yesterday’s surprisingly upbeat retail sales data, the pound could’ve ended the day much, much lower.
Weak consumer confidence and higher unemployment led many to believe that we’d see horrendous sales figures for the month of October. As such, the markets were quite surprised to see that retail sales rose 0.6% last month, rather than fall 0.2% as forecasts had predicted. Apparently, Britons are starting to feel the holiday spirit as promotions and discounts attracted consumers to spend, spend, spend!
Hmm… Could this be a sign of things to come in the next two months? Remember, consumer confidence wasn’t exactly high in October, and yet we still saw an impressive increase in sales. As the holidays draw closer, we may see sentiment and spending improve even further!
Nothing more to see from the U.K. today. As a matter of fact, the economic calendar appears to be light across the boards. That being said, we might not have any catalysts for big moves on the charts today. Keep an eye out for any ranges that may form, fellas!
Ugh, it was so close! The pound started the day strong against its major counterparts, but a bit of profit-taking soon took its toll on the high-yielding currency. Cable tipped an intraday high at 1.5889 before finishing the day with only a 32-pip gain, while GBP/JPY also showed the same picture with only an 18-pip increase at 121.44.
Since risk aversion was the major market theme for last week’s trading, the currency bulls wasted no time in attacking when the bond yields of the euro zone’s peripheral countries experienced some relief.
Too bad the good vibes didn’t last for long! Since no economic reports were released from the U.K. on Friday, traders soon went back to pricing in more economic stimulus from the BOE. If you remember, the BOE not only downgraded its economic outlook in its latest monetary policy decision, it also signaled that it might add its budget for stimulating the economy!
Perhaps we’ll get more clues from the BOE on Wednesday at 9:30 am GMT when its monetary policy decision is released. Until then, we can watch for the Rightmove house price index report scheduled today at 12:01 am GMT, followed by the public sector borrowing data to be released tomorrow at 9:30 am GMT.
But wait, there’s more! Around the same time the BOE minutes are released, we’ll also get hold of the BBA mortgage approvals report. Then, on Thursday at 9:30 am GMT we’ll see the revised GDP report for the third quarter. Lastly, the data on the expectations for the CBI industrial orders will be released also on Thursday at around 12:00 pm GMT.
Don’t even think of missing these potential big hitters!
The pound tumbled down the charts yesterday as risk aversion gripped the markets yet again. GBP/USD ended the day nearly 150 pips down from its 1.5794 open price while GBP/JPY crashed below the 120.50 minor psychological level. What happened and where could these pound pairs be headed next?
The U.K. didn’t release any top-tier reports yesterday, leaving the pound at the mercy of risk sentiment. Unfortunately for the pound, traders weren’t feeling so gung-ho about taking on more risk as the airwaves were filled with news about threats to the global economy. For one thing, credit rating agency Moody’s warned of a possible downgrade to French debt if borrowing costs continue to rise. Another factor that contributed to risk aversion was the U.S. supercommittee’s failure to reach an agreement regarding their spending cuts.
Today, the pound has a chance to redeem itself if the U.K. prints better than expected public sector borrowing data. The report could show that the deficit dropped from 11.4 billion GBP in September to 4.1 billion GBP in October, suggesting that the government’s austerity measures are doing the trick. A smaller than expected figure would imply that the government is able to reduce spending considerably, which could be positive for the pound pairs. Stay on your toes for the actual data due 9:30 am GMT.
Positive economic reports from the U.K.? So what? The pound continued its fall against its major counterparts yesterday as traders started pricing in a bearish report from the BOE. GBP/USD fell by another 13 pips after plunging to an intraday low of 1.5582, while EUR/GBP edged another 14 pips higher at .8641.
Don’t feel bad for the U.K. economy though. Thanks to the government’s efforts at reigning in their debt, the public sector’s net borrowing only registered at 3.4 billion GBP for October. The figure is not only lower than September’s 10.2 billion GBP reading, but is also smaller than the 4.1 billion deficit that analysts were expecting.
Were the pound traders right in pricing in a bearish MPC meeting minutes? At 9:30 am today we’ll read about the details on why the BOE decided to keep its interest rates and its asset purchases steady in its last interest rate decision. Many believe that the central bank is gearing up to stimulate the economy some more, but others also say that the BOE might hold back for another month.
Do you think that the BOE will add to their asset purchases budget anytime soon? Don’t even think of missing this report!
Aaaand the pound is back in action! After consolidating for almost a couple of days, pound pairs broke out of their ranges and made strong moves yesterday. GBP/USD tumbled from its 1.5639 open price to close at 1.5517 while GBP/JPY managed to end 2 pips above the 120.00 handle.
The BOE’s latest monetary policy meeting minutes revealed that the MPC members were unanimous in their decision to keep asset purchases unchanged during their November statement. They did point out that the worsening euro zone debt crisis poses a huge threat to the British economy, but that there wasn’t enough reason to implement another round of easing just yet. The minutes also showed that the policymakers expect inflation to fall below the central bank’s 2% target next year.
BBA mortgage approvals came in better than expected at 35.3K, higher than the estimated 32.3K increase and the previous month’s 33.5K figure. In fact, the October report showed that mortgage approvals are at their highest levels since May last year.
However, these upbeat reports weren’t enough to boost the pound in yesterday’s trading as news of the German bond auctions took the spotlight. You should definitely drop by my euro zone economic commentary to get the scoop on that!
The U.K. is set to release its revised GDP figure for the third quarter of this year, and there are no revisions expected for the 0.5% growth figure. Watch out for the actual release at 9:30 am GMT because a significant upward revision could give the pound the boost it needs. Also keep an eye out for the business investment report, which could show a 0.5% drop in investment for Q3 2011.
Later on, at 12:00 pm GMT, the U.K. will report its CB industrial order expectations for this month. The index is expected to dip from -18 to -19, reflecting lower volume expectations. A higher than expected figure could be positive for the pound while a weaker reading could force pound pairs to extend their losses.
The pound produced another terrible performance for the pound yesterday as it posted a new low versus the dollar. GBP/USD ended the U.S. trading session at 1.5498, 19 pips lower from the price level it started that day. Yesterday marked the fourth straight losing day for the currency and it looks like it will continue on going down.
Even though the U.S. markets were closed for Thanksgiving Holiday, the pound still found a reason to fall due to weak economic data. The preliminary business investment report came in weaker than expected as it showed a 1.4% decline, almost triple the expected decrease. Meanwhile, the second release of the third quarter GDP report confirmed the 0.5% growth the preliminary report initially showed.
Today, the economic cupboard the U.K.'s economic cupboard presents nothing of interest so don’t expect the pound to exhibit as much volatility as yesterday. Still do be careful of retracements though… It is a Friday and traders could start taking profit as they close shop for the weekend!
GBP/USD ended the week on a sour note as it chalked up another set of losses last Friday. GBP/JPY, on the other hand, managed to end Friday in the green as it closed 66 pips up from its 119.47 open price. What’s in store for the pound pairs this week?
There weren’t any economic reports released from the U.K. last Friday but several debt rating downgrades in the euro zone weighed on risk sentiment. This week, the pound could have a chance to recover if its economic data comes in stronger than expected.
To start off, the BOE is set to release the inflation report hearings at 3:00 pm GMT today. Since this report would contain the monetary policy committee members’ varying views on inflation, it could provide some clues on the central bank’s next monetary policy moves. Downbeat comments could drag pound pairs down so make sure you keep close tabs on what the MPC members have to say!
On Tuesday, the U.K. will release the Nationwide HPI, which is expected to show a 0.1% drop in house prices for November. A weaker than expected figure could erase part of the 0.4% increase seen last October, so stay tuned for the actual release at 7:00 am GMT. The Halifax HPI, which came in at 1.2% last October, is also due sometime this week.
The manufacturing PMI and construction PMI are due on Thursday and Friday respectively. Both reports are expected to print declines over the previous month’s figures and, if that’s exactly what we see, the pound could be in for another set of declines as well.
With risk appetite back up, the pound was able to overcome weak sales data and dovish words from central bank officials to end the day higher against its safe haven counterparts. Cable finished 25 pips higher at 1.5504 while Guppy rose 81 pips to close at 120.87.
Phew! The pound sure is lucky that traders were in a risk-taking mood yesterday! It could’ve ended the day much, much lower considering the feedback we got on the economy. First off, the CBI realized sales index dropped from -11 to -19 this month. Not only is that figure far worse than the -12 that economists had predicted, but it also marks the index’s biggest drop in two years!
Sadly, retailers are expecting gloomy days ahead, even with the holidays just around the corner. Word on the street is that they believe spending will decline another 6% next month! What a bummer!
After that downbeat report was released, some BOE officials added to the pessimism, saying that we’ll likely see flat growth in the coming months and that the central bank has good reason to ease its monetary policyfurther. Hmm… I’m beginning to think that the BOE may add more stimulus as soon as next month!
Today at 7:00 am GMT, we’ll begin the day with the Nationwide HPI report, which is due to show a 0.1% decline in house prices after it printed a 0.4% increase last month. After that, we’ll take a look at net lending to individuals data, which is expected to stay flat at 1.0 billion GBP. Last but not least, we’ll have the autumn forecast statement on tap at 12:00 pm GMT. Should these reports print more negative feedback on the U.K. economy, the pound could end up taking a hit!
Score another one for the pound! It followed up its gains on Monday with another awesome performance as GBP/USD climbed 106 pips to finish the day just above the 1.5600 handle. Can the pound make it three in a row today?
It seems that traders couldn’t get enough of the pound after the U.K. published a few upbeat reports, the first of which was the U.K. Nationwide HPI. Despite the fact that the outlook for the economy has deteriorated in recent weeks, house prices were surprisingly resilient this month as the index showed a 0.4% increase instead of a 0.1% decline as many had anticipated.
This figure, which translates to a 1.6% increase year-on-year, is a pretty decent follow-up to last month’s 0.4% increase. Good news, right? Well, not entirely. Housing experts say that the rise in prices was brought about by a lack of supply rather than a strong demand.
Net lending to individuals also picked up nicely in October as lending increased by 1.3 billion GBP. Thanks in part to a big jump in the number of loan approvals for house purchases, actual net lending to individuals was able to outperform expectations by 300 million GBP.
In other news, the Office for Budget Responsibility (OBR) declared that the government is still on track to meet its financial targets for the year. But on the downside, it sees domestic demand weakening in the near future. It’s for this reason that the OBR downgraded its growth forecasts. It revised its 2011 forecast down from 1.7% to 0.9%, while cutting its 2012 forecast from 2.5% to just 0.7%. With such a bleak outlook for the economy, it’s no wonder that many market junkies are expecting more quantitative easing in February 2012!
Just a few hours ago, we got a look at the most recent GfK consumer confidence data. Though it remained in negative territory, it did show a slight improvement from the previous month’s reading of -32. The index printed a reading of -31 for the month of November, beating forecasts by two whole points.
But so far, this hasn’t done much to reignite demand for the pound. Then again, it’s still quite early in the day. Keep watching those charts, fellas!