And the winning streak ends at 5! The pound scored its first loss against the dollar since last week yesterday. GBP/USD traded sideways for the most part, but it looks like there was just not enough lovin’ for the pound. The pair closed with a 3-pip loss at 1.6244.
Risk aversion seemed to have pick up a little yesterday as Portuguese bond yields rose to 8.65% on the 10-year. Economic data from the U.K. also didn’t give investors a lot of reasons to buy the pound either.
Inflation pressures in August were lower compared to July. The headline CPI figure for the month came in just as expected at 2.5% to follow its previous reading of 2.6%. Meanwhile, the core CPI fell short of expectations by 0.1% when it printed at 2.1%.
We’ll probably see more action the pound pairs today with the minutes of the most recent BOE meeting on tap at 9:30 am GMT.
No one expects any member of the MPC to have voted for an increase in interest rates. However, investors will be on their toes for the central bank’s outlook for monetary policy and compare it to that of the Fed and the ECB. The overall consensus is for the BOE to be dovish. However, the Brits aren’t expected to show a strong bias for looser monetary policy.
After testing its 5-month high yesterday, Cable was unable to go any further and ended the day 23 pips lower than its opening price. Is this the beginning of a new downtrend or is the move simply a pullback?
Given Cable’s stellar performance in the past feew days, it seems that yesterday’s move was merely the result of traders taking profit. If you look at the pair’s daily chart, you can see that it has gained 8 out of the last 11 days. This suggests that the pair was severely overbought.
In other news, the MPC Meeting Minutes came in as expected. It showed that all 9 voting members of the committee chose to make no changes to monetary policy.
A major market-mover, the U.K.’s retail sales report, will be released today. It’s scheduled to publish at 8:30 am GMT and the market expects it to show that sales decreased 0.3%. In the month prior, the retail sales report printed a 0.3% gain. Declining retail sales is normally seen as negative for the domestic currency as it consumer spending accounts for around two-thirds of U.K.’s economic activity.
The pound got stuck in the bear lair yesterday as risk aversion dominated market sentiment. GBP/USD dropped to an intraday low of 1.6164 before closing 6 pips below its opening price at 1.6214.
Worse-than-expected manufacturing data from China rained on the pound’s parade. Traders also found little reason to buy the currency after the U.K. retail sales came in at -0.2% for August. Although the figure topped forecasts which was for an increase of 0.3%, some market junkies expected it to come in much higher because of the Olympics.
Today we have one tier-1 data scheduled from the U.K. At 9:30 am GMT, public net sector borrowing for August is anticipated to come in at 13.2 billion GBP. Make sure you keep tabs on it. Who knows, a better-than-expected figure may just allow the pound to erase it’s losses. Good luck!
The pound retreated from its highest level in more than a year against the dollar on Friday, ending the week barely changed. It seems that concerns over the global economic outlook and the prospect of a Spanish bailout greatly hurt risk appetite.
The pound initially rose to a 13-month high last Friday due to the news that Spain would possibly request a full-scale bailout. However, positive sentiment quickly faded when Germany countered that Spain shouldn’t be given additional funds on top of the money that was already given to its banks.
In the U.K., the report on Public Sector Net Borrowing showed that the government’s deficit widened to its biggest on record ever in August. The deficit stood at 12.4 billion GBP, opposite from the previous month’s 1.9B surplus.
No reports on the economic docket today. In the week ahead, the only red flag on U.K.’s economic calendar is the Current Account Balance. It’s slated to show a 12.2 billion GBP deficit, which is slightly higher than the previous month’s 11.2 billion GBP deficit.
With no major reports scheduled from the U.K. yesterday, the pound traders looked to risk sentiment for direction. The pound capped the day lower against its low-yielding counterparts, but it scored a couple of pips against the euro as EUR/GBP fell by 21 pips to .7971.
Cable fell to an intraday low 1.6182 yesterday when risk aversion took over the markets. Apparently, investors didn’t like it that Spain is stalling for time as it avoids officially asking for a bailout while Greece is also struggling to meet the requirements of another bailout tranche. The currency bulls woke up to limit the losses though, and pushed high-yielding assets higher near the end of the U.S. session.
Only the BBA mortgage approvals report at 8:30 am GMT is scheduled for today. The data is expected to clock in at 28,400 in August, which is about the same as its reading in July. Of course, a higher figure could be good for the pound as it signals increased demand for home purchases.
Cable went on a wild seesaw ride yesterday as it managed to climb early in the trading day but sell-off heavily during the U.S. session. The pair opened the day at 1.6217, marked an intraday high at 1.6268, and then eventually fell below the 1.6200 major psychological handle.
Cable’s messy price action was the result of the shifting market sentiment. At first, market participants were optimistic, as the BBA Mortgage Approvals came in significantly better than initially predicted. It showed that 30,500 mortgages were approved in August, higher than the 28,400 forecast. In the U.S., the CB Consumer Confidence survey smashed consensus and printed a reading of 70.3 versus the 63.1 expected.
Unfortunately, the gains were soon reversed when rumors that the legality of the ECB’s Outright Monetary Transactions (OMT) was being questioned by Germany’s Bundesbank came out. The rumors fueled risk aversion and led to a Cable sell-off.
U.K.’s economic cupboard only contains one important data release. At 10:00 am GMT, the CBI Realized Sales survey will be published. The survey is slated to print a reading of 5, opposite the -3 reading seen the month before. A positive number indicates that sales volume is rising.
Strike three for the pound! Despite a strong sales report from the U.K., the pound registered another losing day against its counterparts. Cable fell almost steadily throughout the day, while Guppy also suffered a 27-pip slide. What’s up with that?
Yesterday the U.K. printed its CBI realized sales report, which showed that sales of around 150 retail and wholesale companies rose to a reading of 6, up from its -3 reading in August. Meanwhile, the BOE’s credit conditions survey also showed a “significant” rise in mortgage lending. Ha! Who says the U.K. needs the Olympics to boost economic activity?
Unfortunately, the pound bulls just wasn’t feeling the love yesterday. Instead, all eyes were on the protests in the euro zone as the Greeks joined their Spanish counterparts in protesting against austerity measures.
The U.K. has a lot on its plate today so you better listen up! First, the current account data is scheduled to print at 8:30 am GMT, which is about the same time that the final quarterly GDP and quarterly business investment numbers will also be released. Then, the GfK consumer confidence data is scheduled to come out at 11:01 pm GMT. Traders aren’t expecting fireworks from most of the revised reports mentioned above, but keep close watch on them nonetheless!
Way to go, little one! After consolidating for most of the day, the pound managed to sneak in a few gains against the U.S. dollar and the Japanese yen. GBP/USD ended the day 36 pips above the 1.6200 handle while GBP/JPY closed 2 pips above the 126.00 mark.
Economic figures from the U.K. came in mixed as their current account deficit came in larger than expected while their revised GDP showed a smaller contraction for Q2 2012. The current account deficit widened to 20.8 billion GBP, worse than the estimated 12.3 billion GBP, as the previous figure was revised from an 11.2 billion GBP shortfall to a 15.4 billion GBP deficit.
What boosted the pound’s spirits yesterday was the slight upward revision in its quarterly GDP, which revealed that the U.K. economy shrank less than initially estimated. The report showed a mere 0.4% contraction after revisions from the 0.5% figure previously reported.
Aside from that, the pound was also lifted by improved risk appetite as market watchers seemed happy about Spain’s proposed reforms and budget plans.
Today, the U.K. just released its GfK consumer confidence figure which came in slightly worse than expected at -28. Still, this was a bit of an improvement compared to the -29 reading seen last month, reflecting less pessimism in their economy.
There are no other reports set for release from the U.K. today so make sure you keep close tabs on risk sentiment to figure out where GBP/USD and GBP/JPY could be headed!
Better-than-expected U.K. data? Meh. The pound traders were more interested in risk sentiment as they dragged the currency lower against its counterparts. Cable suffered a 94-pip blow at 1.6142 while EUR/GBP inched 10 pips higher at .7962. What made the euro stronger than the pound last Friday?
Well, Fitch didn’t exactly help the pound bulls. Though the credit rating agency kept its AAA rating for the U.K., it also maintained its negative outlook, saying that the government’s debt and the economy’s growth rate are causes for concern.
Too bad investors just shrugged off the reports from the U.K.! The GfK consumer confidence printed a reading of -28 in September, the highest in 15 months, while a quarterly index of services showed a 0.1% growth against its previous -0.1% reading.
Let’s see if the pound bulls will manage to start the month with some gains. At 8:30 am GMT we’ll see a mob of U.K. data like the manufacturing PMI, individual lending, and mortgage approvals reports. Analysts are generally expecting better figures for this month’s figures, but keep close tabs on them in case we see surprises!
It’s a deadlock, ladies and gents! GBP/USD dipped to a low of 1.6109 and spiked to a high of 1.6176 but finished right where it started, which was at 1.6138. Which way will it go today?
U.K. manufacturing PMI came in below expectations yesterday as the reading fell from 49.6 to 48.4 in September. This was worse than the expected drop to 49.5, implying that the contraction in the industry was deepening.
A couple of medium-tier reports from the U.K. also printed worse than expected results as net lending to individuals came in at -0.4 billion GBP while mortgage approvals posted a 48K reading. Net lending was expected to rise by 0.7 billion GBP while mortgage approvals were estimated to come in at 50K.
Today, only the Nationwide HPI is set for release from the U.K. and this report is expected to show that house prices rose by 0.1% in September. Although this is much weaker than August’s 1.3% reading, an increase is still an increase, right? A weaker than expected reading though could trigger a pound selloff so stay on your toes during the actual release at 7:00 am GMT.
The pound began the day with a pretty impressive performance as it constantly stayed above its opening price and climbed to an intraday high of 1.6188. But its inability to hold on to its gains led Cable to close just 5 pips above its opening price at 1.6138.
The Nationwide HPI showed softness in the housing market as it revealed a 0.4% decline in house prices, instead of the 0.1% uptick that many had predicted.
Likewise, the construction PMI left the markets disappointed as the index only rose from 49.0 to 49.5 and not to 50.0 as many had expected. This marks the second straight month of contraction in the construction industry.
But what’s most interesting about this report is that it suggests that the housing market is to blame for weakness in the construction industry as well! With demand for new homes on the weak side, new construction projects declined in August. What a bummer!
Today, we have the services PMI on tap at 8:30 am GMT. Survey says the index will probably slide down from 53.7 to 53.1. If this report print worse-than-expected results, I wouldn’t be surprised to see sellers resume the pound sell-off.
Another day in the red! The pound was unable to fight back against the Greenback yesterday as GBP/USD closed at 1.6072, 66 pips down from its 1.6138 open price. GBP/JPY, on the other hand, edged slightly higher as it ended the day 20 pips above the 126.00 handle.
Weaker than expected U.K. services PMI weighed on the pound yesterday as the actual figure came in at 52.2, lower than the estimated 53.1 reading and August’s 53.7 figure. Although the September services PMI is still above the 50.0 mark, which indicates industry expansion, the slower pace of growth convinced several market participants that the BOE could announce further easing measures soon.
Will the central bank do that today though? Don’t forget that the BOE monetary policy decision is scheduled at 11:00 am GMT so we might see a very exciting day for pound pairs. Although the BOE is expected to keep rates on hold at 0.5% and their asset purchases unchanged, the accompanying statement from BOE Governor King could contain hints regarding their future monetary policy decisions. Stay on your toes!
Out of the way! Pound bulls charging through! GBP/USD finished the day 119 pips above its opening price at 1.6191. Meanwhile, GBP/JPY was up 81 pips at 127.01 by the end of the New York session.
Pound bulls don’t have to send BOE Governor Mervyn King a Thank-You card for their run though. For the most part, the BOE rate statement didn’t really move the pound as the central bank just kept interest rates and its asset purchase program unchanged.
However, ECB President Mario Draghi’s defense of the euro and assurance that progress are being made in Spain and Portugal, spurred risk appetite and boosted the currency.
Our forex calendar is blank for reports from the U.K. today. But don’t go on thinking that it will be a boring day for the pound. The much-anticipated NFP report from the U.S. will be released at 12:30 pm GMT and I’m pretty sure we’ll see a lot of volatility in the charts then. So good luck!
Hey Mr. Pound, how’s that Friday hangover? With nothing to support its cause, the pound sank to end the week, falling 61 pips to finish at 1.6130. Will we see a similar result in today’s trading wars?
No biggies on tap until tomorrow, when U.K. manufacturing production figures are due at 8:30 am GMT. Expectations are that production dropped by 0.6% last month, after it had rose by 3.2% in the month before.
Keep in mind homies, that this report could pack more heat as traders will likely be keeping tabs on the release. If the report shows that manufacturing dropped more than anticipated, it could give our buddies over at the Bank of England more incentive to drop some QE bombs into the British economy.
Blame yesterday’s big loss on Chancellor Osborne! After he spoke up, the markets dumped the pound, taking GBP/USD down to 1.6029, down 101 pips from its opening price. What in the world did he say?!
Well for starters, he got everyone all worried about the state of the economy with his downbeat remarks. According to Osborne, the U.K.'s recovery isn’t going as strong as he and his men had anticipated, and the government can’t slash its budget at a faster pace.
Hmm… At this rate, it looks like the U.K. may have a hard time meeting its budget targets. Could this pave the way for more quantitative easing down the line? Maybe!
In other news, the BRC retail sales monitor just came out a few hours ago and it printed a 1.5% increase last month following the 0.4% decline in August. Meanwhile, the RICS House Price Balance report exceeded expectations by printing a reading of -15% instead of -20%.
Up ahead, we have more reports coming our way. First up is the manufacturing production report, which is due at 8:30 am GMT and is slated to show a 0.6% slide in output. Also scheduled for release at 8:30 am GMT is the trade balance report. Survey says we’ll probably see the U.K.'s deficit widen from 7.1 billion to 8.3 billion GBP.
To round up our day, we’ll take a look at the NIESR GDP Estimate, which is expected to print a reading of 52.3, up from 51.8. Tune in at 2:00 pm GMT to catch it!
Thanks to poor economic data and a case of risk aversion in the markets, the pound suffered for the third consecutive day, as GBP/USD dropped 41 pips to finish at 1.5988. Will the losing continue or will we see a midweek reversal?
Manufacturing production came in worse than expected, printing a 1.1% decline for the past month, after growing by 3.1% the month before. Meanwhile, the trade deficit widened to 9.84 billion GBP, after it was projected to come in at just 8.50 billion GBP.
What really sank the pound’s ship yesterday though were comments by Bank of England head honcho Mervyn King. King said that there was no “technical limit” to the amount of quantitative easing that the central bank could implement. Considering that he also said that he felt there wasn’t enough liquidity in the market, some analysts are thinking that the BOE may just expand its asset purchase program next month.
The only bit of good news to hit the U.K. was the NIESR GDP forecast, which is predicting that the U.K. economy grew by 0.8% over the past quarter. Given the mixed data we’ve been seeing lately though, it’ll be interesting to see whether this is right on the money or way off target.
No biggies lined up today from the U.K., so your best bet would to take trading clues from risk sentiment. If it appears that other higher yielding currencies are taking a hit, the pound may just follow suit!
Without any economic reports from the U.K., the pound was simply chillin’ like ice cream fillin’ on the charts in yesterday’s trading. It ended the day 23 pips higher at 1.6011 against the dollar. Meanwhile, it was almost unchanged against the yen finishing the day 4 pips below its opening price at 125.08.
Our forex calendar still doesn’t have anything from the U.K. today. This probably means that we’ll see the same driver of global risk sentiment influence the pound today.
Don’t get too lax though! Market sentiment could change drastically with all the developments happening in the euro zone. Keep in mind that the pound usually does well when risk appetite is up but often trades lower when risk aversion is in play.
Make that back to back, sire! Thanks to improved risk appetite, GBP/USD rose for the second straight day, as the pair climbed 35 pips to finish at 1.6046. Can the bulls make it three in row?
Even with no hard data release from the U.K. yesterday, the pound was able to rally thanks to a positive reaction to the U.S. weekly jobless claims report. Make sure y’all hit up my USD commentary for the 411 on unemployment claims data!
For today, we’ve got nothing lined up once again, but that doesn’t mean you can just take chill pill. Over the past couple of days, we’ve been hearing from government officials (Chancellor Osborne) and MPC members (Martin Weale) talk about the economy and the effectiveness of the Bank of England’s monetary policy. If we hear more surprise comments today, it could set the tone for pound trading during the London session.
Aha! It looks like traders were as excited as Twilight fans are over the upcoming Breaking Dawn movie last Friday. Rumors that a Spanish bailout and a PBOC rate cut would happen over the weekend encouraged risk taking and allowed higher-yielding currencies, including the pound, to rally against the dollar and the yen.
GBP/USD finished the week at 1.6077, 31 pips above Friday’s opening price, while GBP/JPY closed at 126.04 after opening at 125.71.
There wasn’t a lot of market-moving data released from the U.K. last week which made the pound quite vulnerable to market sentiment. However, with our forex calendar filled with a handful of top-tier events from London in the coming days, brace yourselves for more volatility from the pound.
The very first major report is the U.K.'s CPI report which will be released tomorrow at 8:30 am GMT. September’s headline figure is anticipated to clock in at 2.2% while the core reading is seen at 2.1%.
On Wednesday, a couple of figures on employment will be on tap and are scheduled along with the MPC meeting minutes. Then finally, on Thursday, the retail sales report for September is anticipated to come in at 0.5%.
GBP/USD traded in an almost perfect “U” pattern yesterday as it fell during the Asian session but recovered nicely once the European trading session rolled along. It began the day at 1.6075 and closed the day barely changed at 1.6071.
The U.K. didn’t release any major reports yesterday so GBP/USD’s up and down movement was most likely the result of the mixed data that came out from the U.S. While the U.S. retail sales came out notably better than expected, the empire state manufacturing index disappointed the market and failed to meet forecast.
U.K.’s economic cupboard is filled to the brim today as a couple of tier 1 data is scheduled for release. At 8:30 am GMT, U.K.’s consumer price index and PPI reports are due. For the CPI, it is expected to show that inflation eased to 2.2% from the previous month’s 2.5%. As for the PPI, it is slated to report that input prices remained flat while output prices rose 0.3%.
Also watch out for the BOE’s inflation letter to be possibly released. If the CPI comes in higher than 3.0% or below 1.0%, Mervyn King will have to explain to the U.K. parliamentary what happened and what is being done to fix the situation.