Even though economic data from the U.K. was mixed, the pound still found a reason to climb up in the charts yesterday. GBP/USD, which began the Asian trading session at 1.5917, closed the day with a respectable 33-pip win.
There were two key reports that were published yesterday - the Nationwide House Price Index and the Manufacturing PMI.
The Nationwide House Price Index came showed that the average selling price of homes rose by 0.6%, double the increase initially expected. It was also a welcome improvement from the the month priorâs 0.3% decline.
On the other hand, U.K.'s Manufacturing PMI failed to meet expectations. It printed a reading of 51.2, lower than both forecast and the previous monthâs figure.
Today, the only tier 1 report scheduled for release is the Construction PMI. Itâll come out at 9:30 am GMT and it is slated to print a 51.3 reading. Given the general uptrend of GBP/USD as of late, better-than-expected figures could lead to a strong rally.
Despite a better-than-expected economic report, Cable capped Friday with a ridiculous 112-pip loss at 1.5838. The pound showed nice dojis against its other counterparts though, with EUR/GBP closing with only a 5-pip loss.
Only the construction PMI report was released in the U.K. last Friday, so traders barely reacted to the report and focused on risk sentiment instead. The PMI was promising though, as it clocked in a 54.3 reading in February when market geeks were only pricing in a 51.3 index figure.
If youâre looking for more pound trades this week, then youâre in for a treat! The services PMI report will start the fireworks today at 9:30 am GMT, and will be followed by the BRC retail sales monitor and Halifax house price index tomorrow at 12:01 am GMT.
The MPC will also take the stage on Thursday just a few hours before the ECB as it announces its interest rate decision. MPC members as well as BOE Governor King himself have been hinting that inflation numbers reduce the need for more stimulus, so market geeks arenât expecting changes in this weekâs interest rate decision.
On Friday weâll not only get hold of the NFP report from the U.S., but weâll also see the U.K.âs manufacturing production report and the PPI numbers at 9:30 am GMT.
Donât even think about missing these reports!
Cable was off to a weak start as it dipped briefly below the 1.5800 handle before bouncing back on its feet and closing at 1.5865. Guppy was also able to recover during the U.S. session, but not enough to close higher than its 129.55 open price. Can the pound pairs hold on to their recent gains today?
Weaker than expected services PMI weighed on the pound during yesterdayâs trading as the index fell from 56.0 to 53.8 in February, lower than the projected 55.0 reading. Components of the report revealed that the downturn in sales growth was the primary reason for the weak reading as companies had to deal with the decline in consumer spending.
Fresh off the press is the BRC retail sales monitor which showed a 0.3% year-over-year decline in same-store sales at the retail level, confirming the slump in spending in the U.K.
Later on, at 8:00 am GMT, the U.K. is set to release its Halifax HPI reading for February, which is expected to show a 0.3% uptick in house prices. A stronger than expected figure could keep the pound afloat since higher house prices could attract investor activity and spur growth in the housing market. Make sure you keep an eye out for this report!
Thar she blows! No major economic report was released from the U.K. yesterday, so the pound wasnât able to escape the risk aversion train that hit the markets. Cable registered a 168-pip drop to 1.5697, while GBP/JPY also fell by 215 pips to 127.11.
Only the BRC shop price index report was released from the U.K. yesterday, and even that failed to provide support for the pound. Prices of goods in BRC-member retail stores only grew by 1.2% in February after rising by 1.4% in January.
The report didnât cause much impact on the pound, but it supported investorsâ concerns that the BOE is only holding off more stimulus because of high inflation rather than strong economic growth.
Maybe weâll hear more details about what the BOE thinks when the U.K.âs Monetary Policy Committee announces its interest rate decision today at 12:00 pm GMT. Since the central bankâs asset purchases facility and interest rates are expected to remain at 325 billion GBP and 0.50% respectively, analysts arenât expecting any word from the BOE. But youâll never know when a surprise comes your way, so you better keep close tabs on these reports nonetheless!
The pound decided that it needed a break from diving yesterday as it moved sideways against the U.S. dollar and the Japanese yen. GBP/USD was able to end in the green as it closed 16 pips up from its 1.5722 open price. GBP/JPY also enjoyed some gains as it landed at 127.75 at the end of the day. Was this a mere retracement or the start of a reversal?
The lack of economic data from the U.K. yesterday probably explains the lack of direction among the pound pairs. Either that or traders are hesitant to take any huge pound positions prior to the BOE rate statement at 12:00 pm GMT today.
Recall that the central bank decided to pull the trigger on another round of quantitative easing during their February statement, as the U.K. struggled with low economic growth and subdued inflation. With that, BOE Governor King and his men are expected to keep rates on hold and make no changes to monetary policy this time around as they assess the effect of their recent decision on the U.K. economy.
Pay attention to the accompanying statement though, as this can contain clues on the BOEâs future policy decisions. After all, recent economic figures from the U.K. have been mixed so it would be interesting to see how BOE officials would react to those. More dovish remarks and downbeat forecasts could force the pound to resume its slide so stay on your toes, folks!
Weâre finally seeing solid gains! With risk appetite taking center stage in markets yesterday, Cable jumped 84 pips higher than its open price, while GBP/JPY also rose by 135 pips to 129.10. How much did the BOEâs interest rate decision factor into the poundâs price action?
Not that much, apparently. The Bank of England decided not only to leave its rates unchanged at 0.50% for March; it also kept its asset purchases at 325 billion GBP.
BOE Governor Mervyn King also warned of increased inflationary risks as well as potential uphill battles of the economy due to the governmentâs fiscal consolidation plans. But since the central bankâs decision was widely expected, the pound bulls concentrated on risk appetite in markets instead.
Will the pound gain against its low-yielding counterparts for a third day in a row today? At 9:30 am GMT weâll get hold of the countryâs manufacturing production and PPI reports.
Both tier 2 reports are expected to come in stronger than their previous figures, but make sure you keep your eyes peeled for any surprises!
Oh, thatâs gotta burn! GBP/USD took a nasty tumble on Friday as it closed nearly 150 pips down from its 1.5821 open price. GBP/JPY, on the other hand, managed to pocket a few gains as it ended 19 pips above the 129.00 handle. Where could the pound be headed today?
Economic data from the U.K. came in mixed last Friday, which probably explains the poundâs mixed performance that day. Manufacturing production data failed to meet expectations as it posted a mere 0.1% uptick for January instead of the predicted 0.3% increase. However, the December figure enjoyed a slight upward revision from 1.0% to 1.1%, showing that manufacturing production was a tad better than initially estimated.
Producer input prices, on the other hand, beat expectations as it chalked up a 2.1% increase for February. This was more than twice as much as the expected 0.9% increase for the month. However, the previous figure was revised from 0.5% down to a mere 0.1% increase.
With that, consumer inflation expectations edged down from 4.1% in January to only 3.5% for February. Since expectations of future inflation tend to manifest into real inflation, we just might see lower inflationary pressures down the line for the U.K.
There arenât any economic reports due from the U.K. today as its first set of data, in the form of the RICS house price balance, is due tomorrow 12:01 am GMT. Their trade balance is also due tomorrow and is expected to print a slightly wider deficit of 7.8 billion GBP for January.
On Wednesday, the claimant count change data will be released along with the U.K.'s unemployment rate. This tends to be a big mover for the pound pairs so make sure you mark that event on your calendar if you plan to trade the news.
No other reports are set for release from the U.K. so donât forget to keep tabs on market sentiment to see which other factors could move the pound. Good luck trading this week!
Back to back losses for the pound! For the second straight day, the British currency found itself on the losing team as it edged lower against the dollar and the yen. While GBP/JPY fell steadily to inch down 64 pips to 128.63, GBP/USD sold off sharply in the London session to end the day 27 pips lower at 1.5641. Will it extend its losses today?
Bearish momentum must have carried the pound lower yesterday because we didnât really have any economic events to work with from the U.K., save for a minor report from the Lloydâs Bank Corporate Markets. According to the index of job security, Britons were less concerned about losing their jobs in February than they were in January. Cool beans! Now, letâs see if this translates to more jobs in tomorrowâs employment reports!
Looking ahead, we have the RICS house price balance report on tap at 12:01 am GMT. Look for this index to print a decrease of -14%, following the previous monthâs -16% slide.
Later in the day, at 9:30 am GMT, U.K. trade balance data will be available. Will imports outweigh exports to widen the U.K.'s trade deficit from 7.1 billion GBP to 7.8 billion GBP as most have forecasted? Youâll just have to tune in to find out!
Though these reports arenât exactly big market movers, they may get the pound to sell off sharply if they print numbers deep in the red, so donât miss 'em!
Whoâs ready for another round of choppy price action? The pound is! GBP/USD made some wide swings yesterday as it dipped to a low of 1.5621, jumped to a high of 1.5748, then slid back down to close at 1.5705. GBP/JPY, on the other hand, made a steady climb all the way past the 130.00 handle.
Better than expected economic figures from the U.K. gave the pound a boost during the Asian and London sessions. The RICS house price balance reported early on came in better than consensus as it printed a 13% decline in house prices instead of the projected 14% drop.
The trade balance also beat expectations as it showed that the deficit widened from 7.2 billion GBP to only 7.5 billion GBP in January, a bit narrower than the predicted 7.8 billion GBP deficit. Components of the report revealed that the 2.0% growth in exports was outpaced by the 2.6% rise in imports, which was mostly spurred by the surge in oil prices.
For today, a bigger report is on deck for the U.K. as it is set to release its claimant count change data and unemployment rate. Claimants are expected to be up by 6.5K in February, a slightly smaller figure than the 6.9K reading printed for January. This should be enough to keep the U.K.'s jobless rate steady at 8.4%, but if we see a larger than expected increase in claimants, we may see an increase in the unemployment rate as well. A smaller than expected figure, on the other hand, could be bullish for the pound pairs. Stay tuned for the actual release at 9:30 am GMT!
Worse-than-expected employment data may have kept the pound from rising against the dollar, but the British currency defied gravity against the yen! While Cable inched 30 pips down to 1.5675, Guppy flew up 98 pips to forge a fresh high at 131.25. Crazy!
According to the latest claimant count change report, jobless claims increased by a total of 7,200 last month, which is 1,700 more than the forecasted figure. In turn, this kept the unemployment rate at 8.4%, its highest level since 1995!
The problem with the U.K.'s labor market isnât so much with the private sector â the numbers show that companies are hiring! Whatâs dragging the job market down is the governmentâs lay-offs! Just one of the drawbacks of austerity measures, folks!
No U.K. events on tap for today except for a speech by MPC member Broadbent at 11:30 am GMT. Tune in for clues on what the BOE may do next!
Bring it on, Fitch! The renowned credit rating agency finally stripped the U.K. of its pristine AAA rating. However, despite that, the pound still was still able to stand its ground against the dollar on the charts. GBP/USD ended yesterdayâs trading 36 pips above its opening price at 1.5711.
Perhaps pound bulls had already braced themselves for a downgrade. After all, the agency did give out a warning earlier to the U.K. Some market junkies speculate that another reason why the currency didnât get sold off was because the other two renowned credit rating agencies, Moodyâs and S&P, still have a stable outlook for the British economy.
BOE MPC member Ben Broadbent also stepped up with hawkish remarks that helped the pound. In a statement yesterday, he mentioned that uncertainty in the euro zone could have favorable effects on the economy that may lead to tighter monetary policy. Boo yeah!
However, with our forex calendar blank for reports from the U.K. today, will there still be enough positive vibes to boost the pound on the charts?
Err, market sentiment will likely be the primary driver of the currencyâs price action. So be sure you keep tabs on it, ayt? Peace!
Now thatâs what I call a bull run! Thanks to overall dollar weakness, pound bulls had a field day and pushed GBP/USD up 135 pips to 1.5845. Can they extend their rally with help from the many heavy reports coming from the U.K. this week?
The action will begin tomorrow with the release of CPI data at 9:30 am GMT. Forecasts have inflation ticking lower from 3.6% to 3.4%. I know yâall are familiar with how inflation has been a hot topic in the U.K. for the past couple of years, so I donât think I need to tell you how big of a potential market-mover this report could be!
On Wednesday, weâll pick up with the MPC meeting minutes and public sector net borrowing data at 9:30 am GMT. Look for hints that MPC members may be leaning towards more easing. As for public sector borrowing, expect it to show a surplus of 5.2 billion GBP, up from the previous monthâs 10.7 billion GBP deficit. Rounding up our day at 12:30 pm GMT is the annual budget release, which will reveal exactly how much the government plans to spend for the year. This will be a critical report to watch because of its implications on the governmentâs austerity measures!
Then on Thursday, weâll take a look at retail sales data at 9:30 am GMT. Things arenât looking bright for consumer spending as economists are predicting a 0.5% decline following the previous monthâs 0.9% uptick.
Phew! What an action-packed week weâve got ahead of us! Be sure you act appropriately by reading the School of Pipsologyâs lessons on trading the news!
Why thank you Mr. Miles! Thanks to some rather bullish comments by the MPC hotshot helped the pound rally higher to start the week. GBP/USD managed to post a 53-pip victory and close at 1.5894. Could Lady Cable be headed back to 1.6000?
According to Miles, housing prices in the U.K. should continue to ârise for yearsâ. Now if that ainât a bullish statement, then I donât know what is! In any case, this comment tips the hand of one of the MPCâs members. This could be his way of saying that he feels that the bank has done enough to provide liquidity in the markets, as he expects the housing market to remain strong.
For today, weâve got CPI figures coming in at 9:30 am GMT. Once again, this report could play a major factor as to what the BOE plans to do heading forward. Expectations are that inflation dipped a bit from 3.6% to 3.4% in the past month, bringing it closer to the top of the central bankâs 1%-3% band.
If the data comes in to show that inflation has dropped much more than anticipated, the pound may just give back its gains as it could signal that the BOE would have more room to add additional easing measures.
The pound pulled off a Chris Brown in yesterdayâs trading and headed [I]Down [/I]the charts amid a mixed roster of economic reports. GBP/USD ended the day 31 pips below its opening price at 1.5863.
Inflation figures for February didnât disappoint expectations, but neither were they hotter-than-expected. The headline CPI figure printed at 3.4% and the core reading came in at 2.4%.
On the other hand, the CBI industrial order expectations index fell short of the market consensus. The figure for March clocked in at -8 while analysts were expecting a more modest contraction of -5.
Todayâs going to be a big day for the pound so be sure you donât miss the events we have scheduled!
At 9:30 am GMT, the minutes of the most recent BOE MPC meeting will be released. Market junkies will most probably be on their toes to see what the committeeâs general consensus is regarding inflation. If they expect consumer prices to rise even more in the coming months, they may just hold off increasing their stimulus package for the economy.
Along with that, data on public sector net borrowing will be on tap. The forecast is for spending to have outpaced public income by 5.2 billion GBP. If youâre planning to go long on the pound, you may want to cross your fingers for the actual figure to come in less than expected.
Then at 12:30 am GMT, Finance Minister Osborne will present his annual budget plan to the parliament. It will be interesting to hear what he has in store for the U.K. economy, however, it should be revisions in the GDP forecasts that you should watch out for. Currently, the Office for Budget Responsibility sees a 0.7% growth for the economy in 2012. We may just see the pound rally if the reading is upwardly revised. So be on your toes!
What a crazy day for Lady Cable! After shooting higher at the start of the London session to hit a high at 1.5924, GBP/USD soon came crashing down, falling to as low as 1.5818. By the end of the day though, GBP/USD had reversed course and finished at 1.5873, up 10 pips from its opening price.
The pound took some hits thanks to the worse-than-expected public sector net borrowing figures. The government ran a deficit of 12.9 billion GBP last February, which was more than double the expected 5.2 billion GBP figure. This was a little concerning, as it meant the government borrowed more despite the implementation of tighter austerity measures.
Meanwhile, two members of the MPC still feel that British economy could use some more juice to spruce it up. According to Adam Posen and David Miles, there is room to add an additional 25 billion GBP to the central banksâ asset purchase program and that doing so would help mitigate the effects of weak growth. While the other 7 MPC members donât feel the same way, it will be interesting to see if the two doves can convince the others to join their flock.
The one bit of good news yesterday was the tone from Chancellor of the Exchequer George Osborneâs speech at the annual budget release. Osborne upgraded his 2012 growth forecasts from 0.7% to 0.8%. He also said that the budget deficit should drop to 7.6% of GDP by next year. The upbeat comments helped provide support for the pound, which recovered late in the New York session.
For today, weâve got another red flag coming up in the form of the retail sales report at 9:30 am GMT. Expectations are that retail sales dropped by 0.5% last month, which is a complete reversal from the red-hot 0.9% growth we saw in January. If this figure comes in even worse-than-anticipated, we could see GBP/USD slide down the charts.
Traders dropped the pound like itâs hot following disappointing U.K. data yesterday. GBP/USD tumbled to an intraday low of 1.5771 after spiking up to its high of 1.5893. It then closed the day at 1.5816, 48 pips below its opening price.
Retail sales for February printed a 0.8% contraction, following the 0.3% growth it posted in January. It also disappointed expectations which was for a modest decline of 0.5%. Yikes!
The report probably upset investors as it could give the central bank one more reason to add more stimulus to the economy. Remember that earlier on in the week, the pound also got sold off after the BOE minutes revealed that two members of the MPC suggested to launch another round of QE to support the economy.
And it looks like the bad vibes didnât end there! Earlier, it was reported by Nationwide that consumer confidence dropped in February. Its index came in at 44 and fell short of the marketâs forecast which was for a reading of 49.
I wonder if the BBA mortgage approvals report will be able to help shield the pound from the bearsâ attacks. Due at 9:30 am GMT, the market is expecting to see that 39,100 mortgage requests were approved during the month.
A better-than-expected figure will probably be bullish for the pound, so watch out!
Despite the worse-than-expected reports from the U.K., Cable still managed to some gains last Friday. It closed the U.S. trading session at 1.5869, 48 pips higher from its opening price that day.
The Nationwide Consumer Confidence survey came in with a reading of 44, 5 points lower than forecast. It was also worse than the previous monthâs 47 reading. Meanwhile, the BBA Mortgage Approvals reported that only 33,100 mortgages were approved. The forecast was for 39,100.
There are a number of economic data reports scheduled for release this week from the U.K., but only two are top-tier. On Wednesday, at 8:30 pm GMT, the countryâs current account balance and final GDP figure will be published. The market anticipates the current account balance to print a 8.5 billion GBP deficit and the final GDP to show no changes from the preliminary report (0.2% contraction).
Letâs see if this weekâs major reports will keep Cable trading within its sideways range.
Whoa! Talk about a comeback! The pound was trading lower against the dollar during the Tokyo and London sessions and tapped an intraday low of 1.5801. It then hustled some muscle and rallied to end the day at 1.5971, 99 pips above its opening price.
There wasnât any economic report released from the U.K. over the weekend and yesterday. However, it would seem that the dollar weakness (sparked by Fed Chairman Bernankeâs very dovish remarks) overwhelmed traders and consequently benefited higher-yielding currencies such as the pound.
I think that weâll see market sentiment dictate the poundâs price action for the most part of todayâs trading. But the CBI Realized Sales report for March could probably affect it too, so be sure you donât miss it! Due at 10:00 am GMT, the report is eyed to print at -4 which means that retailers anticipate a contraction in the sales volume for the month.
A better-than-expected figure may help the pound extend its rally so watch out!
GBP/USDâs winning days finally came to an end yesterday as it traded within a tight range between 1.5940 and 1.6000. At the end of the day, however, the pair closed the day slightly lower than its opening price.
There isnât much to talk about in terms of economic releases as only the CBI realized sales report was released. It came in with a reading of 0, much better than both the forecast and the previous monthâs reading.
In contrast to yesterday, GBP/USD could experience a bit more movement today as a two important economic reports are scheduled to come out at 8:30 am GMT. Specifically, the current account balance and the final revision on the U.K.âs 4Q 2011 GDP will be published.
The current account balance is anticipated to show an 8.5 billion GBP deficit. Meanwhile, the final GDP is expected make no revisions on the 0.2% contraction initially reported.
Blimey, did I just see the pound fall? The pound took hits against its counterparts yesterday on risk aversion and poor economic data from the U.K. Cable capped the day with a 63-pip loss at 1.5891, while Guppy also 103-pip hit at 131.61.
Aside from overall risk aversion in markets, the pound bears got a kick out of the downward revision to the U.K.âs GDP yesterday. The data clocked showed a 0.3% contraction in the fourth quarter, a bit worse than the expected 0.2% decline. As it turned out, the lack of improvement in the service sector weighed on improvements in industrial and construction sectors.
The current account deficit report probably helped stem the losses though, as it printed at an expected 8.5 billion GBP in the fourth quarter after showing a revised 10.5 billion GBP figure in the previous quarter.
Will the pound get any support from the data scheduled today? At 7:00 am GMT weâll see the Nationwide house price index report, followed by the consumer lending numbers, BOE credit conditions survey, and mortgage approvals report at 9:30 am GMT. Most of these reports are expected to retain their previous figures, so make sure you keep an eye out for any surprises!