Weaker confidence on the U.K. economy? No problem! Currency bulls pushed the pount higher against the dollar and the yen last Friday, with GBP/USD finishing the day with a 49-pip gain at 1.5995. Meanwhile, EUR/GBP held on to its gains with a doji at .8338.
Pound bulls mostly shrugged off the GfK consumer confidence data, which fell to an index reading of -31 in March after printing at -29 in February. Apparently, consumers aren’t too excited about Chancellor Exchequer George Osborne’s plans to implement more austerity in the country.
Will the pound bulls and bears also shrug off reports coming up this week? We have a couple of big-hitters due over the next couple of days, starting with the manufacturing PMI today and the quarterly housing equity withdrawal report at 9:30 am GMT.
Tomorrow we’ll get hold of the Halifax house price index as well as the construction PMI report at 9:30 am GMT. Then, on Wednesday at 12:01 am GMT, we’ll get to see the BRC shop price index data, followed by the services PMI report at 9:30 am GMT.
Thursday is an important day for the markets as the manufacturing and industrial production reports will be released at 9:30 am GMT, just hours before the BOE is set to announce its interest rate and asset purchases decision at 12:00 pm GMT. Market geeks are expecting a few more MPC honchos to vote for more stimulus, but many aren’t holding their breaths. The NIESR GDP estimate will also take the spotlight at 3:00 pm GMT.
On Friday the U.K. will take a breather in observance of Good Friday, but that doesn’t mean that you shouldn’t watch your charts! It’s the NFP Friday after all!
The pound ended the day with mixed results against its counterparts yesterday as better-than-expected U.K. reports jumbled with risk aversion during the European session. Cable rose by 22 pips at 1.6034, but GBP/JPY dropped by 147 pips to 131.58.
U.K.’s manufacturing PMI surprisingly came at 52.1, its fastest pace in 10 months, thanks to a rise in new orders. Meanwhile, the quarterly value of new home-secured loans that are not used for home purchases or improvements fell by 8.5 billion GBP in the fourth quarter of 2011, which suggests that all is not well with the economy after all.
Good thing that traders mostly ignored the quarterly data and focused on the more recent manufacturing PMI report. Score one for the pound bulls!
Will the U.K. surprise the markets again with its construction PMI report due at 9:30 am GMT today? The data is expected to print a bit lower than its 54.3 reading in February, but keep your eyes peeled for any surprises!
Just when you thought Cable was going to sail through the day smoothly, it suddenly experienced a huge crash before closing the U.S. trading session. The pair ended the day at 1.5916, 118 pips lower from its opening price.
In a surprising turn of events, the FOMC meeting minutes released yesterday showed that the Fed probably wouldn’t engage in another round of quantitative any time soon. This gave the dollar some muscle, which enabled it to soar versus the pound.
In other news, U.K.’s construction PMI came in much better than expected. It printed a reading of 56.7, higher than the 53.6 initially predicted.
More data reports are lined up today as the Halifax house price index and U.K.’s services PMI are due. The Halifax HPI, which will be published at 7:00 am GMT, is slated to show a 0.3% decrease. If forecast holds, it’ll be an improvement from the previous month’s 0.5% decline. Then, at 8:30 am GMT, the U.K. services PMI will come out. It is anticipated to print a reading of 53.5 for March, slightly lower than the 53.8 reading seen in February.
After a brief stay above the 1.6000 handle last week, GBP/USD took a nasty tumble for the next few days and closed at 1.5876 on Friday. GBP/JPY had its share of losses as well as it crashed to a low of 129.15 during the week. Will the pound continue to drop this week?
Last week, the BOE announced its decision to keep its asset purchase facility unchanged at 325 billion GBP and its benchmark rate on hold at 0.5%. Despite that, the pound ended the week on a negative note as risk aversion weighed on the British currency.
British banks are still on a holiday today, which means that there aren’t any economic releases scheduled. The action will heat up tomorrow when the U.K. prints its RICS house price balance at 12:00 am GMT and when BOE policymaker Adam Posen gives his speech at 12:30 am GMT. Bear in mind that Posen is one of the decision makers in the monetary policy committee so his testimony is likely to contain some clues on the central bank’s future policy decisions.
Only the BRC retail sales monitor is set for release on Wednesday while Thursday has the U.K. trade balance on tap. For February, the trade deficit is expected to widen slightly from 7.5 billion GBP to 7.6 billion GBP, but a smaller than expected deficit could keep the pound afloat.
Before the week comes to a close, the U.K. will release its PPI figures on Friday 9:30 am GMT. Producer input prices are expected to be up by 1.3% in March, much less than the 2.1% increase seen last February, while output prices could show a 0.5% uptick. Weaker than expected producer inflation figures could confirm that inflationary pressures are winding down in the U.K., which could give the BOE more room for further asset purchases so make sure you keep tabs on this report!
Though U.K. banks were closed in celebration of Easter Monday, the pound managed to grab a few pips here and there against its major counterparts. GBP/USD closed 29 pips above last Friday’s close at 1.5905 after gapping up over the weekend. Meanwhile, GBP/JPY inched up 27 pips to finish at 129.82.
To be honest, we didn’t get much movement on the charts over the past 24 hours. With many markets still closed, yesterday was a real snoozer! However, we could see a lot of volatility today as traders return from vacation. Besides, the U.K. already started publishing some reports!
Just a few hours ago, the RICS house price balance report came out, and it surprised to the upside. U.K. house prices dipped just 10% last month, its smallest decrease in almost two years, to beat forecasts which called for a 12% decline. Apparently, confidence seems to be returning as a more rosy economic outlook and buying ahead of the expiry of a stamp duty exemption helped support house prices in March.
Today, we have the BRC retail sales monitor report on tap at 11:01 pm GMT. If it prints above the previous month’s reading of -0.3%, it could spur demand for the pound as it is sometimes considered a preview to the monthly retail sales report. Stay sharp and happy trading, folks!
Yowza! Did you see that massive cable drop yesterday? GBP/USD topped at a high of 1.5931, before plummeting to a low of 1.5809 and closing at 1.5869. Meanwhile, GBP/JPY crashed below the 130.00 handle and ended right at the 128.00 mark.
The U.K. didn’t release any top-tier reports yesterday but it did print a 1.0% climb in its leading index and a 1.3% increase for its BRC retail sales monitor. Despite these improvements in the U.K. economy, the pound fell victim to risk aversion which plagued the markets yesterday.
There aren’t any economic reports due from the U.K. today, which means that pound pairs could be vulnerable to risk sentiment again. Be careful out there!
Did someone press CTRL+Z? Because the British pound just undid all of its losses from Tuesday! With no major events on the calendar, GBP/USD was able to rise 38 pips and close at 1.5907.
Unfortunately, the economic calendar will remain light for today, as we only have a couple of tier 2 events on tap. First, the U.K. will break its silence with its monthly trade balance report, due at 8:30 am GMT. Survey says we’ll probably see its trade deficit widen from 7.5 billion GBP to 7.7 billion GBP. I big upside surprise could lead to another round of pound buying, so you may want to check your charts when this report comes out.
Then at 6:00 pm GMT, we’ll be treated to a speech by MPC member Adam Posen, who happens to be one of the central bank’s more dovish members. If he starts barking about the need for further stimulus, as he has done many time in the past, we could see the market react by selling off the pound.
Make that back to back for Lady Cable! Once again, the pound rose up the charts, posting decent 56-pip and 38-pip victories versus the dollar and yen respectively. Can the pound bulls make it three in a row to end the week?
Is the strength of the pound fo real? After all, it was able to rally despite the release of weaker-than-expected trade balance figures! Last February, the U.K. posted a trade deficit of 8.8 billion GBP, which was bigger than the anticipated 7.7 billion deficit. Could it be that the British government’s austerity measures are weighing down local demand?
For today, we’ve got the producer price index coming at 8:30 am GMT. Word is that producer input prices – the prices at which producers pay for their raw materials – rose by just 1.2% last month, down from the 2.1% growth we saw in February.
Remember fellas, producers normally pass on any additional costs to everyday blokes like you and I to pay. Thus, this report is a leading indicator of inflation. If today’s report indicates that inflation is much more subdued than it has been, it could give room for the BOE to add to its asset purchase program in the coming months.
Abracadabra! And just like that, the pound’s gains from Wednesday and Thursday are gone! With risk aversion dictating price action, the pound lost major ground against the dollar last Friday. As a result, GBP/USD greeted the weekend 117 pips lower on the day at 1.5845. Can we expect it to further weaken this week?
Though the PPI report bested expectations (1.9% vs 1.2%), it really didn’t do much to stop the pound from falling. And the Rightmove HPI report didn’t help much either, even though it printed a nice improvement in house prices as the index raised its reading from 1.6% to 2.9%. It seems that risk sentiment is just too strong a force to overcome.
In any case, we’ve got plenty of other potential market movers coming from the U.K. this week, so don’t lose hope if you’re a news trader!
We’ll start off with the Nationwide consumer confidence report, which is due today and is slated to downgrade its reading from 44 to 42. Then we’ll pick up with the CPI report, which is expected to tick up from 3.4% to 3.5% when it comes out at 8:30 am GMT tomorrow.
Then on Wednesday we have a doubleheader as the U.K.'s claimant count report and MPC meeting minutes will come out at 8:30 am GMT. Look for employment stats to show job gains of 6,600 and the unemployment rate to remain steady at 8.4%.
Lastly, we’ll be treated to retail sales data on Friday. Survey says this report will show a 0.4% surge in prices, a nice follow-up to the weak sauce 0.8% slide we saw in February.
Phew! As you can see, we’ve got an action-packed week ahead of us. Be sure to take into consideration possible swings in volatility if you plan on trading the pound! Good luck, fellas!
Mixed results for the pound yesterday, which rallied against the dollar but stumbled against yen before recovering late in the day. By the end of the New York session, GBP/USD traded 49 pips higher to finish at 1.5897, while GBP/JPY backed off its lows at 127.12 to close at 127.88, marking a 32-pip loss for the day.
Thanks to better-than-expected retail sales data from the U.S., we saw a nice risk rally take place during the London-New York overlap session. This helped buoy the pound and let it bounce off its lows for the day.
We could be in more strong moves today, as monthly consumer price index will be released. This report measures the change in prices of consumer products like beer, footballs, and top hats, which account for a huge portion of overall inflation. Expectations are that prices rose by 3.5%, which would be slightly higher than the 3.4% figure we saw last month.
I suspect that many traders will be paying attention to this report, as it could play a deciding factor in whether or not the Bank of England will eventually add to its asset purchase facility. A lower-than-expected number would give the BOE more room for more bond purchases, which could trigger a pound sell-off.
In any case, make sure you tune in at 8:30 am GMT as that’s when the report will be made available!
Investors found the pound hot-hot-hot! in yesterday’s trading following the release of U.K.'s CPI figures. GBP/USD rallied from its intraday low of 1.5862 and closed the day at 1.5950. Meanwhile, GBP/JPY ended the day with a 101-pip win at 128.89.
Consumer prices rose by 0.3% in March consequently bringing the annualized CPI reading up to 3.5% from 3.4% in February which was exactly what markets had anticipated. The core reading also printed as expected at 3.6%.
Traders got extra giddy over the figures because higher inflation could be one more reason for the BOE not to increase its asset purchases. It is also for this precise reason that a lot of market participants are keeping their eyes peeled for the minutes of the BOE’s most recent meeting. And so should you!
Make sure you gauge the tone of the statement when it is released later at 8:30 am GMT. If markets feel that BOE members are very worried about inflation even before taking into consideration the most recent CPI figures, the pound could rally. However, if we see that the proposal of increasing stimulus program got more than two votes, the pound could get sold off.
Along with the minutes, employment data will also be released. The claimant count change for March is eyed at 6,600. Meanwhile, the unemployment rate is seen to remain steady at 8.4%. Better-than-expected figures could provide the pound with some support on the charts, so watch out!
What a day for Lady Cable! Thanks to some rather unexpected details that were revealed in the BOE minutes, the pound rose against all its major counterparts. GBP/USD blew past the 1.6000 handle to finish at 1.6020, up 87 pips on the day. Meanwhile, EUR/GBP set new lows and is now trading below the .8200 psychological level.
So what exactly was revealed that helped the pound burn up the charts like a Jay-Z single?
It turns out though BOE member Adam Posen, who shouted out for some more QE lovin’ last month, dropped his demands for additional asset purchases. Last March, Posen, along with David Miles both called for an expansion of 25 billion GBP for the asset purchase facility. Yesterday’s developments now leave Miles as the sole member of the dove camp, but even he said that the current policy in place was just right for now.
Still, the BOE did express some concerns about inflation in the medium-term. Deputy governor Paul Tucker said that the central bank believes that there’s a strong possibility that inflation will remain above the BOE’s 3.0% target for the remainder of the year. That said, don’t expect any rate hikes any time soon.
In other news, we got good results from the employment reports, as both came in better-than-expected. The claimant count change report showed that only 3,600 more people filed for unemployment benefits last March, after it was expected to come in at 6,600. Meanwhile, the unemployment rate dropped from 8.4% to 8.3%.
No biggies on the docket today, but take note that Adam Posen will be speaking at a conference today. He will probably be badgered with questions about why he backed off the need for more quantitative easing, so watch out!
Talk about reaching new highs! Nope, that has nothing to do with today being 4/20. I’m talking about the pound tapping a new five-month high against the dollar at 1.6078 before closing the day with a 38-pip win at 1.6058! Boo yeah! Against the euro, it also rallied to its highest level in 20 months at .8161.
There were no reports released from the U.K. yesterday. However, the good vibes from the less-dovish-than-expected BOE minutes still lingered in the markets and allowed the pound to outshine its counterparts. Heck, it’s not nicknamed Sterling for nothing, ya know!
For today, we have the retail sales report for March on tap at 8:30 am GMT and it is eyed to come in at 0.4%. Some analysts think that there’s a good chance that we’ll see the actual figure top the forecast because they expect the improvement in labor conditions (which we saw on Wednesday) to have translated to spending.
If they’re right, a better-than-expected figure may just spur the pound even higher on the charts. If not though, we could see the currency pare some of its gains. So don’t miss the report later!
Don’t take the power of consumers too lightly! Thanks to a very strong retail sales report, Cable was able to stage a magnificent rally last Friday. The pair ended the day at 1.6120, 62 pips higher from its opening price during the Asian trading session.
Retail sales for March in the U.K. was reported to have surged at its fastest pace in more than a year as consumers boosted their purchases of clothing and gardening equipment. Demand for vehicle fuel also increased. Retail sales jumped 1.8%, more than 3 times the expected rise. It was also opposite the 0.8% fall seen the previous month.
This week is a big one for Cable as U.K.’s preliminary GDP report will be published on Wednesday. It is slated to show a 0.1% growth rate for the first quarter of 2012. If it comes out negative, then it will mean that the U.K. has plunged into recession (two quarters of negative growth), which could lead to Cable sell-off.
Before that, however, prepare yourself for the report on Public Sector Net Borrowing. It’ll come out tomorrow, at 8:30 am GMT. Analysts predict a 15.6 billion GBP surplus for March, which is slightly higher than the 12.9 billion GBP surplus seen the month before.
Ah, ha! It looks like the pound is off to a good start! Despite risk aversion dominating market sentiment, it was still able to hold its ground against the dollar. GBP/USD ended yesterday’s trading 25 pips higher at 1.6129. Meanwhile, against the euro, it tapped its 20-month high at .8148 before EUR/GBP closed at .8154.
A report from thinktank Center for Economic and Business Research (CEBR) might have helped the pound stay afloat on the charts. According to their estimates, inflation is not likely to meet the BOE’s 2% target in 2012 as oil prices continue to trickle higher.
The news must have gotten pound bulls excited as the prospect of higher inflation pressures could keep the BOE from increasing its stimulus program.
Now the question is, will there be enough good vibes from the news left to help the pound extend its gains in today’s trading?
Hmmm, traders may need more good news from the U.K. to convince them to keep on buying the currency especially with political troubles in the euro zone taking their toll on market sentiment. With that said, be sure you keep tabs on the public sector net borrowing report for March which is due later at 8:30 am GMT. It is anticipated to show that the income of public corporations and local governments outpaced their spending by 15.0 billion GBP. If you’re looking to buy the pound, be sure you keep your fingers crossed for the figure to come in higher than expected!
Is there no stopping the pound? For straight day, the currency was able to edge higher against the safe haven dollar. The pound rallied throughout the day, closing the U.S. trading session versus the dollar 9 pips higher from its opening price.
The pound’s rally was the result of external events rather than internal though. In the U.S., the CB consumer confidence survey and the S&P/Case-Schiller HPI both came in worse than forecast. In the euro zone, borrowing costs in Italy achieved the market’s expectation of 2.5 billion EUR while the yields on Spanish 10-year bonds are back below the 6.00% level.
Today will be a big day for the pound as the U.K.’s preliminary GDP report is scheduled to print. The GDP report, which will come out at 8:30 am GMT, is expected to show that the country expanded 0.1% in the first quarter of this year. If it fails to meet consensus and comes in negative, expect to see the pound sell-off strongly as it will mean that the U.K. has fallen into recession.
It’s official! The U.K. is back in a recession! So why did the pound strengthen against its counterparts? In fact, Cable even rose by 33 pips while Guppy closed 101 pips from its intraday low! What the heck happened?
Yesterday the U.K.’s Q1 2012 GDP clocked in a 0.2% contraction. Since it followed the 0.3% decline we saw in Q4 2011, the data officially puts the U.K. back into a recession. Apparently, the 3% decline in construction was one of the biggest factors that dragged the data to a negative territory.
And it doesn’t end there! The quarterly change in the value added by private and government sectors to the GDP only came in at 0.2%, which is a lot weaker than the expected 0.6% rise. Lastly, the CBI industrial order expectations fell to a -8 index reading in April, which suggests that manufacturing activity in the U.K. will remain weak for a while.
Luckily for the pound bulls, the pound was able to recover from its daily lows thanks to a dollar bearish FOMC statement and a bit of risk appetite in markets.
Will the pound continue its winning streak today? A couple of tea cups ago we saw the Nationwide consumer confidence print a reading of 53 in March, which is a lot better than the previous 44 reading.
At 9:30 am GMT we’ll get hold of the BBA mortgage approvals report, which is expected to rise to 34,300 from its previous 33,100 figure. Lastly, we’ll see the CBI realized sales data at 11:00 am GMT. The report is expected to print lower than its previous reading, but keep an eye out for any surprises!
It’s not only Bayern Munich that’s going to go on a victory party this weekend but Cable as well! Once again, Cable was able to post a winning day, thanks to improved market confidence. Cable, which had started the day at 1.6171, found itself at 1.6193 by the end of the U.S. trading session.
Cable’s gains came despite economic data releases failing to meet expectations. The BBA Mortgage Approvals survey that was published, for instance, was at 31,900, lower than the 34,300 forecast. It was also worse than the previous month’s 32,800 (revised down from 33,100).
U.K.’s distributive trades survey also shared the same negative result. It came in at -6, 2 points lower than consensus. The distributive trades survey is a leading indicator that measures whether sales of retail and wholesale companies are rising or not. A number greater than 0 means higher volume.
It seems that Cable was able to keep its composure not because the U.K.’s fundamentals are strong but rather risk appetite has improved since the FOMC’s interest rate decision. If you recall, the Fed was pretty optimistic as they upgraded their growth forecast.
No red flags on the U.K.’s economic calendar today but the U.S. Advance GDP report is scheduled to print at 12:30 pm GMT. The report tends to be a major market mover, which means Cable will see a lot of movement! Watch out for that!
There’s no stopping the pound bulls! Thanks to risk appetite in markets, the pound was able to continue its winning streak against its counterparts. GBP/USD, for example, rose by another 63 pips to 1.6256.
Last Friday the GfK consumer confidence data from the U.K. revealed that optimism hasn’t improved among consumers in April. The data clocked in at -31, which is the same as March’s figure. Remember that a reading below 0 means that consumers are pessimistic on the outlook of the economy.
Thank goodness there was risk appetite to save the day! Thanks to better-than-expected reports from the other major economies and speculations of a possible QE3 from the Fed, high-yielding currencies like the pound were able to extend its gains against its low-yielding counterparts.
Will the pound continue its winning streak today? No economic report is scheduled for release today, but watch out for the manufacturing and construction PMI reports coming up tomorrow and on Wednesday at 9:30 am GMT! The U.K. has just dipped in a technical recession, so downside surprises to these indicators could make a dent to the pound’s recent gains.
It ends at 10! After pushing Cable higher for 10 days straight, the pound bulls took a breather yesterday as GBP/USD ended the day with a 46-pip loss at 1.6230. Are we seeing a retracement or a reversal?
We can’t know for sure just yet. No economic report was released yesterday, so the high-yielding pound traded on risk aversion in markets brought on by weak U.S. data and fears of debt contagion in the euro zone.
Will the pound pare its losses today? Only the manufacturing PMI report at 9:30 am GMT is scheduled to come out from the U.K. Markets expect the figure to print a 51.4 reading from March’s 52.4 figure, but some say that the data could print lower. In any case, make sure you’re around to trade pound pairs when this report comes up!