With many European traders on a holiday and the U.K. printing weak data, the pound bulls hardly saw any action yesterday. GBP/USD capped the day 10 pips below its open price while EUR/GBP closed at .8162 after hitting an intraday high of .8199.
Only the manufacturing PMI data was released from the U.K. yesterday, but it was enough to spark concerns for the economy. The report came in at an index reading of 50.5 in April, which is the slowest pace of expansion since December. As it turned out, the data was dragged by the sharpest fall in new export orders since May 2009.
Good thing that the pound bears weren’t feeling too hungry yesterday! Traders are still optimistic on the high-yielding pound, especially with the summer Olympics just around the corner and ready to boost economic activity.
Let’s see if we’ll see more disappointments from today’s economic data. At 9:30 am GMT we’ll get hold of the construction PMI, which will be released at the same time as the mortgage approvals and consumer lending data. These reports are expected to come in slightly weaker than their previous figures, but keep an eye out in case we see upside surprises!
Make that three! The pound fell against the U.S. dollar for the third day in a row as GBP/USD just couldn’t seem to sustain its rally. After dipping to a low of 1.6160, cable ended the day right at the 1.6200 handle while GBP/JPY hovered around the 130.00 mark and closed 17 pips below it.
The U.K. printed a better than expected construction PMI reading for the month of April as the figure landed at 55.8, slightly higher than the consensus at 54.1. However, the April figure was still down from March’s 56.7 reading, reflecting a weaker expansion in the construction industry and explaining why the pound still lost to its counterparts yesterday.
Today, it will be the services sector’s turn to release their PMI for April at 8:30 am GMT. The reading is expected to dip from 55.3 to 54.4 during the month, showing that the services industry is still expanding but at a slower pace. Keep an eye out for the actual release because a stronger than expected figure could keep the pound afloat and pare its losses against the U.S. dollar and Japanese yen.
The pound bites the dust… again! For the fourth straight day, Cable ended in the red as weak U.K. data pushed the pair down 19 pips to close at 1.6181. Hmm… I’m starting to notice a pattern here!
Thanks (or no thanks?) to yesterday’s releases, the pound had difficulty finding buyers in the markets. The Nationwide HPI fired the first salvo by printing a 0.2% decline in house prices for the month of April, which is a far cry from the 0.6% uptick that analysts had predicted.
For those of you taking note, this is the fourth time in the last five months that house prices have fallen! According to Nationwide, the expiry of the stamp duty holiday in late March is to blame, as it boosted house prices in early 2012.
Then, the services PMI followed up with another weak showing as it failed to meet expectations and recorded a drop from 55.3 to 53.3 Though the index remained above the 50.0 figure, indicating expansion in the services sector, it failed to match the 54.4 figure that many were expecting to see. Yikes! I daresay that this slowdown is but another sign that the U.K.'s recovery is losing steam!
The only report on the docket for today is the Halifax HPI. The index is expected to show a 0.4% decline and is due at 7:00 am GMT. To be honest, it probably won’t do much to get the markets going, but if it prints a highly negative figure, it could spark another pound sell-off.
Also, keep in mind that the U.S. is set to publish its NFP report today, so be extra careful while trading GBP/USD! To guide you with your trades, I suggest you read Forex Gump’s piece on Trading the Non-Farm Payrolls. Good luck and May the fourth be with you!
The pound marked its fifth consecutive day of losses against the U.S. dollar as traders weren’t in the mood for risk at all. GBP/USD slipped below the 1.6200 handle and closed at 1.6151 while GBP/JPY suffered nearly a hundred-pip loss as it closed 5 pips below the 129.00 handle.
Weaker than expected data from the U.K. was probably one of the reasons for the pound’s terrible performance on Friday. The U.K. printed a poor Halifax HPI reading of -2.4%, which was much worse than the predicted 0.4% decline. This was also enough to erase the 2.2% gain seen during the previous month, as the British housing sector remains one of the weakest parts of the U.K. economy.
It didn’t help that the U.S. NFP figure also missed expectations, further reducing traders’ appetite for risk. Make sure you check out my U.S. economic commentary for the rest of the details on the April NFP report.
British banks are on a holiday today in observance of May Day, which leaves pound pairs at the mercy of risk sentiment. Aside from that, it looks like the coast is clear in terms of U.K. economic reports for the next couple of days, which gives you enough time to prepare for the BOE’s monetary policy decision on Thursday. Don’t forget to keep an eye out for the U.K. PPI figures due on Friday as well!
It ends at 5! It didn’t matter that U.K. banks were closed in yesterday’s trading, the pound managed to rally anyway! It ended its long losing streak against the dollar as Cable climbed 61 pips to finish just below the 1.6200 handle. What can we expect as U.K. traders return from their long weekend today?
Well, if the RICS house price balance report is anything to go by, the pound might just erase some of yesterday’s gains. The report printed a reading of -19% for the month of April, which is not only a huge downgrade from March’s -11%, but is also a far cry from the -10% reading that most analysts had predicted.
I did a bit of detective work and I found out that the expiration of the stamp duty exemption had a hand in the report’s decline from March to April. But since this is only expected to have a temporary effect, I can’t help but wonder if and when the housing market will show signs of recovery!
We won’t be getting any major reports from the U.K. until Thursday, when the BOE is scheduled to hold its rate statement. So 'til then, risk sentiment might be the key driving factor behind the pound’s price action. Stay flexible, folks!
Looks like Monday was just a one day breather for Lady Cable! The pound resumed its losing ways yesterday, as GBP/USD dropped 39 pips from its opening price to finish at 1.6155, basically give back all of Monday’s gains.
Safe havens dominated the trading scene yesterday, strutting their stuff along forex avenue as higher yielding currencies looked on with sour faces. BRC retail sales figures didn’t help much either, as it showed that sales have dropped 3.3% from levels a year ago.
No reports coming out from the U.K. today, but I suggest you be on the lookout for any developments in the euro zone, more specifically in Greek politics. If the situation worsens, it may just trigger a market-wide sell-off, so be ready!
The pound gave as good as it got yesterday as it weakened against the dollar but strengthened against the euro. Cable finished 9 pips lower at 1.6146 after hitting an intraday low of 1.6068, while EUR/GBP ended the day 36 pips below its opening price. What’s in store for the pound today?
The newswires were silent yesterday, but it looks like our homies up in the U.K. plan to make up for it today. We’ve got a whole bunch of must-catch events on tap today, the most important of which is the MPC rate statement.
At 11:00 am GMT, the BOE is scheduled to make its monetary policy announcement. Though the economy has continued to show signs of weakness (as evidence by a decline in the manufacturing, services, and construction PMIs) since the central bank’s last rate statement, it’s likely that the BOE will keep monetary policy unchanged for now.
Inflation remains a big pain in the neck for policymakers, and adding more stimulus to the economy would probably just aggravate the situation. Besides, the most recent MPC meeting minutes revealed that the MPC has become less dovish, with Adam Posen abandoning his call for more QE. If you want to learn more about what to expect from this major market event, I suggest you check out Forex Gump’s guide to trading the May 2012 MPC rate decision.
Aside from the big statement, we also have a couple of economic reports to take note of. At 8:30 am GMT, manufacturing production data will be available, and survey says it’ll print a 0.5% uptick following the previous month’s 1.0% slide.
After that, we’ll take a look at the NIESR GDP estimate, which showed a modest growth of 0.1% the last time it came out. Another weak reading from this report could dampen demand for the pound, so you might wanna check this release out at 2:00 pm GMT.
Thanks to risk aversion easing and some positive data, the pound was able to get some much-needed breathing room yesterday. It was able to gain slight versus the safe haven Greenback as it closed the U.S. trading session at 1.6152, 6 pips higher from its opening price that day.
The March manufacturing production report came in better than expected. It showed a 0.9% increase for the month, a welcome improvement from the previous month’s 1.1% decrease. It was also almost double the 0.5% gain initially predicted.
Meanwhile, the Bank of England (BOE)’s interest rate decision was in line with market forecast. The central bank chose to keep the benchmark interest rate at 0.50% and leave the asset purchase program unchanged. For now, it looks like the market will have to wait for another month for any clues on the bank’s monetary policy plans.
Today, the U.K.’s economic calendar only has one red flag on it. At 8:30 am GMT, the PPI Input which measures the monthly change in the price of goods and raw materials bought by manufacturers will be published. It is slated to show a 0.9% decrease in prices, opposite the 1.9% jump seen the month before.
Boy, did the pound paint the charts red on Friday–with red candlesticks, that is! GBP/USD opened at 1.6152 and plunged straight down, closing the day at 1.6075. Against the yen, the pound gave up 67 pips and ended the week at 128.47.
Aside from lingering concerns about the debt crisis which fueled risk aversion, profit-taking might have also contributed to the pound’s decline. Remember that the currency rose on Thursday after the BOE left interest rates and its asset purchase facility unchanged.
Of course, it also didn’t help that the PPI input report for April disappointed expectations. Analysts anticipated the decline in the price of raw materials purchased by manufacturers to have been more modest at 0.9% but the actual figure showed a 1.5% contraction.
For today, we don’t have any economic data from the U.K. However, I think that it’s important for to keep an ear out for updates from the euro zone if you plan on trading the pound. More bad news from the region could spark risk aversion and send the pound further down the charts.
The pound sure knows a thing or two about being resilient, doesn’t it? While other higher-yielding currencies got hit by risk aversion, the pound managed to outpace the Greenback as GBP/USD closed 30 pips up from its 1.6066 open price. Will it be able to hold on to its gains today?
The U.K. didn’t release any economic data yesterday yet the pound managed to hold its ground against the safe-haven U.S. dollar. As it turns out, the successful U.K. bond auction was one of the reasons that boosted the pound. U.K. gilts received strong demand as the government was able to sell roughly 2 billion GBP worth of bonds, with yields falling from 3.43% to 3.224%.
The only top-tier release on the U.K.'s agenda for today is its trade balance, which is expected to show that the deficit narrowed from 8.8 billion GBP to 8.4 billion GBP in March. Keep an eye out for the actual release at 8:30 am GMT because a smaller than expected deficit could provide support for the pound while a weaker than expected figure could be bearish for pound pairs.
Uh-oh! I feel like I jinxed the pound by calling out its resilience against the dollar in Monday’s trading. Yesterday, GBP/USD plunged like J. Lo’s neckline after tapping its intraday high at 1.6115. It closed the day at 1.5997, 99 pips below its opening price.
But nah! I think risk aversion stemming from concerns about the euro zone as well as worse-than-expected data from the U.K. were responsible for the pound’s demise.
It was reported that the country incurred a trade deficit of 8.6 billion GBP in March. Although the market had already braced for a deficit, the actual figure was still bigger than the forecast which was for imports to have outpaced exports only by 8.4 billion GBP.
We’ll probably see a lot of movement on the GBP pairs again with a handful of high-caliber reports on tap from the U.K. today.
At 8:30 am GMT, the claimant count change report for April will be released and it is anticipated to show that 4,900 people filed for unemployment benefits during the month. Meanwhile, the unemployment rate is seen to match March’s reading of 8.3%.
Then at 9:30 am GMT, market junkies will be keeping an ear out for BOE Governor Mervyn King’s speech and as he discusses the BOE inflation report. Be on your toes for clues about quantitative easing. Concerns about the U.K. being in a recession and lower inflation forecasts will probably be bearish for the pound as those could give the BOE reason to inject another stimulus package into the economy.
Stay tuned!
Well, well, well, it looks the BOE Governor Mervyn King did quite a number on Cable’s price action yesterday! Due to King’s bearish inflation report, Cable dropped like a rock. It closed the day at 1.5909, 88 pips lower from its opening price.
In his inflation report, Governor Mervyn King warned of a “spillover” effect. If the situation in the euro zone gets even worse, the U.K.’s economy could also be negatively affected. Because of this, he reiterated his call to European leaders to create a “credible solution” to the region’s crisis. At the end, King said that he and his associates were in the process of making contingency plans in the event of a “worse-case scenario.”
Economic data was positive though. The Claimant Count Change showed a 13,700 net reduction in the number of unemployed people. The consensus was that another 4,900 people lost jobs. Meanwhile, the unemployment rate showed that joblessness fell to 8.2% from 8.3%.
Today, no economic data is due but BOE Member Martin Weale is scheduled to speak at 11:00 am GMT. He’s an important member of the BOE’s Monetary Policy Committee so it’ll be important to hear what he has to say. He might drop some much-needed clues about what the central bank will do next.
Look down beloooow! Investors dropped the pound in yesterday like it was a hot potato. GBP/USD tapped its 6-week low at 1.5794 before it closed the day at 1.5805, 109 pips below its opening price. Meanwhile, GBP/JPY ended the day a whopping 250-pip loss at 125.25.
What the heck happened?
Well, we didn’t hear any disappointing news from the U.K. However, some analysts say that it might have only been yesterday that investors were really able to digest the dovish remarks that BOE Governor Mervyn King’s said on Wednesday.
Of course, it also did not help that risk aversion was still the dominant theme in the markets.
Our forex calendar is once again blank for reports for the pound today which could mean that it may still be vulnerable to market sentiment. With that said, be sure you keep tabs on updates from the euro zone. More bad news from the region could shoo away investors from higher-yielding currencies.
Good luck!
Last Friday, market participants started speculating about the possibility of another round of quantitative easing from the U.S… This gave the chance for Cable bulls to fight back. The pair fell initially to 1.5750, but as soon as the European trading session began, it rallied non-stop to close the day at 1.5831.
No major news report was published in the U.K. last Friday but this week, it has a lot on its economic plate.
Today, at 8:00 am GMT, MPC Member Adam Posen will make a speech. Even though he’ll be in Japan talking about financial regulation, it’s still best to keep an ear open to what he has to say. You never know if he’ll drop clues about the MPC’s future plans regarding monetary policy.
On Tuesday, the U.K.’s much-anticipated inflation figures will be published. The market expects the Consumer Price Index to taper down to 3.1% from last month’s 3.5%. The report on public sector net borrowing will also come out. The forecast is for a 5.4 billion GBP decline, opposite the month prior’s 15.9 billion GBP increase.
On Wednesday, both the MPC Meeting Minutes and the U.K.’s retail sales report will be released. The MPC Meeting Minutes is anticipated to show that all 9 members voted for no change in policy. Meanwhile, the retail sales report is slated to come in with a 0.7% decline for the month of April. In March, retail sales rose 1.8%.
The last report that needs you attention is the revisions on the U.K.’s GDP. It’ll publish on Wednesday and is expected to show no changes from -0.2%. If we see upward revisions, we could see the pound rally as traders reverse their initial positions.
As you can see, there’s a lot on the economic calendar this week. This means that you should be extra careful in trading!
The pound edged higher against its counterparts for the second day in a row yesterday despite the lack of economic data from the U.K. Cable capped the day 59 pips from its intraday low, while Guppy rose by another 39 pips to 125.61. Here’s what’s ahead for the pound.
Pound traders will be alive and kickin’ today as the U.K. releases its CPI report at 8:30 am GMT together with the public sector borrowing and house price index data. Talk about a triple threat!
The CPI report will most likely gain the most attention as it might give clues on the BOE’s next monetary policy decisions. If you remember, Adam Posen hinted late last week that he might’ve spoken too soon when he removed his calls for more stimulus.
Apparently, economic growth is looking worse than he originally thought. If CPI comes in weaker than the expected 3.1% figure, then the pound bulls might hustle enough muscle to push the currency higher!
No other major report is scheduled for release today, but that doesn’t mean that you can snooze! Keep an eye out for risk sentiment, as it also affects how strong the U.K.’s reports affect the pound pairs.
Good luck trading today, kids!
The pound was absolutely and indubitably demolished by the safe haven dollar yesterday as the U.K’s consumer price index failed to meet market expectations. Cable, which had started the day at 1.5840, found itself 83 pips lower by the end of the U.S. trading session.
The U.K.’s consumer price index slowed more than economists forecast, falling to 3.0% instead of 3.1%. Last month, the CPI stood at 3.5%. Because of the weaker-than-expected inflation rate, traders sold the pound heavily as they believe that the Bank of England (BOE) has more leeway now to undertake more quantitative easing (QE) to provide some support for the economy.
In more positive news, the report on Public Sector Borrowing beat market forecast. It showed that the income by public offices were much greater than their spending by 18.8 billion GBP. The market had initially predicted an 8.5 billion GBP surplus. Moreover, the previous month’s 15.9 billion GBP deficit was revised up to 14.6 billion GBP.
Today, there are two major reports coming out from the U.K. Both will be published at 8:30 am GMT and both will probably have a strong impact on Cable’s price action.
The first one is the retail sales report. It is slated to show that sales fell 0.8% in April, opposite the 1.8% gain seen in March.
The second one is the minutes of the most recent BOE interest rate meeting. The market widely expects that all 9 voting members opted for no change in policy. It’ll be interesting to see what the meetings reveal though, especially since the CPI report showed that the inflation rate has greatly fallen.
When there’s a possibility of a QE, you can bet your neighbor’s cat that the currency bears will take action! Thanks to weak economic data from the U.K., Cable dropped by another 48 pips to 1.5709, while GBP/JPY also slipped by 113 pips to 124.87. Yikes!
As if risk aversion and increased possibility of a Grexit weren’t enough to spook the pound bulls, the MPC meeting minutes also revealed an increased possibility of a QE. While all central bankers agreed to keep its cash rates at 0.5%, only 8 out of 9 of them agreed to keep its asset purchases intact. David Miles was the sole dissenter this time.
Too bad the country’s retail sales data wasn’t any help either. Poor employment rate and record rainfall contributed to the fastest slide in retail sales spending in April. The data printed a 2.3% decline for the month after showing a 2.0% growth in March. Meanwhile, the CBI industrial orders expectations also came in weak with a -17 reading in May against its previous reading of -8.
At 8:30 am GMT today we’ll be seeing a lot of reports. The revised GDP data, which could confirm the country’s recession status, will be released together with the BBA mortgage approvals report and the quarterly business investments data. David Miles, the sole supporter of more asset purchases, is also scheduled to speak at 11:15 am GMT so make sure you stick around!
A fresh round of risk aversion pushed the pound lower against the U.S. dollar and the Japanese yen as growth concerns dominated the airwaves yesterday. GBP/USD broke below the 1.5700 major psychological handle and closed at 1.5666 while GBP/JPY ended the day at 124.72. Are there more pound selloffs in store for today?
Remember when the U.K. released its preliminary GDP reading for the first quarter and revealed that the country entered a technical recession with a 0.2% contraction? At that time, several market participants refused to believe their eyes as they hoped for an upward revision that’d show that the U.K. isn’t in a recession after all. Well, their bubble got burst yesterday as the revised GDP figure even showed a downward revision to -0.3%! This time, it’s really official!
Recall that a few BOE officials have already been quoted saying that they could relaunch the asset purchase program if economic conditions continue to deteriorate. Now that explains why the pound just can’t seem to get back up on its feet!
There aren’t any economic reports on the U.K.‘s agenda for today, which means that risk sentiment could continue to influence the pound pairs. Unless we hear of any good news that’d significantly affect traders’ appetite for risk, we could see the pound move further south. Be mindful of potential profit-taking though!
Are the pound bulls and bears ready for a reversal? Thanks to the lack of data from the major economies, the pound ended the day almost unchanged against its counterparts last Friday.
GBP/USD only slipped by 6 pips to 1.5660, while EUR/GBP closed at .7990 after hitting an intraday high of .8047. Meanwhile, GBP/JPY inched 3 pips higher to 124.75.
No economic report was released from the U.K. last Friday, so the pound’s price action was mainly influenced by risk appetite and profit-taking ahead of the possibly eventful euro zone weekend.
But with threats of more easing still fresh in investors’ minds, it was easy for a few pound bears to continue shorting the currency.
Let’s see if we’ll get more action from the pound this NFP week when a couple of tier 2 reports are scheduled for release. No economic report is listed to come out today, but tomorrow we’ll get hold of the CBI realized sales data, followed by the mortgage approvals, individual lending, and consumer confidence reports on Wednesday.
Only the Nationwide house price index is slated to come out on Thursday, but the NFP Friday might bring even more volatility as the Halifax house price index, manufacturing PMI, and the U.K.’s 10-year bond auctions are scheduled.
Good luck bagging pips this week, homies!
After gapping higher against the Greenback over the weekend, the pound slid back down as the day dragged along and eventually closed the gap. GBP/USD dipped to a low of 1.5663 then ended the day at 1.5665.
The U.K. didn’t release any economic reports yesterday, leaving pound pairs at the mercy of risk sentiment. Luckily for the pound, U.S. traders were off on a Memorial Day holiday yesterday, keeping the selloffs relatively subdued.
Today, the U.K. is set to print its CBI realized sales figure for May. The reading is expected to dip from -6 to -7, reflecting another decrease in sales volume for the month. A higher than expected figure could keep the pound afloat while a lower than expected figure could force pound pairs to resume their downtrends, so make sure you keep an eye out for the actual release at 10:00 am GMT.