Strike five for the pound bulls! Thanks to risk aversion and not-so-awesome economic reports, the pound ended the day slightly lower against its counterparts. Cable lost 6 pips while Guppy fell by 14 pips. What were the U.K. reports about anyway?
If the pound junkies had traded purely on economic reports, then the bulls might have had a chance. The country’s CPI came in at 2.7%, a jump from the 2.2% that we saw last month. Since the BOE folks are already worried about the stimulus measures firing up inflation, the report all but signaled a non-action by the BOE next month.
The PPI input report also should’ve encouraged the bulls as it printed a 0.4% rise after falling by 0.1% in September. The house price index wasn’t so hot though, as it only showed a 1.7% growth when market geeks were expecting a 2.1% uptick.
Today we’ll get our hands on more major reports. The claimant count change is expected at 10:30 am GMT, around the same time when the unemployment rate and the average earnings index data are also scheduled for release.
At 11:30 am GMT BOE head honcho Mervyn King will take center stage as he gives the inflation report. Will the uptick in inflation convince the central bank to stay put in their policies for next month? Keep your eyes peeled for these reports!
Are those fresh 10-week lows I see on GBP/USD? Why, yes they are! No thanks to the dovish tone of the BOE’s quarterly inflation report, GBP/USD was sold-off heavily yesterday. It started the day at 1.5874, dropped to its lowest level in 10 weeks at 1.5839, and then closed the U.S. trading session at 1.5854.
In its quarterly inflation report, the BOE downgraded the U.K.’s economic forecasts and said that growth would probably be weak for an extended period of time. The BOE projects that GDP will grow by 2% in 2 years and inflation will be around 1.9%. The quarterly inflation report also suggested that the central bank hasn’t ruled out expanding its asset purchase facility.
In other news, U.K.’s employment data came in mixed. The Claimant Count Change came in worse than expected as it showed that there was a 10,100 increase in the number of people who claimed for jobless insurance in October. In contrast, the unemployment rate fell to 7.8% from 7.9%.
Today, we’ve got U.K.’s retail sales report on deck. It’s projected to show that sales fell 0.1% in October after it had risen 0.6% the month before. Falling retail sales are considered bearish for the domestic currency. The actual result will publish at 9:30 am GMT.
After dumping the pound for 6 days in a row, market bears took their foot off the pedal yesterday, allowing GBP/USD to end just 3 pips lower at 1.5851. Have sellers finally run out of steam?
You’d think that they would have another field day after seeing the disappointing U.K. retail sales report. It was about as bearish as it can be! It revealed a 0.8% drop in October, far worse than the 0.1% decline that was predicted. Meanwhile, September’s retail sales growth of 0.6% was revised down to 0.5%.
Apparently, sales of food, clothing, and footwear pulled back last month, which is sort of surprising considering the holidays are just around the corner. What a way to kill optimism for the economy!
No more reports on the economic calendar today. In the meantime, keep risk sentiment in check, homies!
Consolidation was the name of the game for Cable last Friday as it simply moved within a horizontal channel. The pair started the day at 1.5851, rose to an intraday high at 1.5895, fell to 1.5835, and then closed the U.S. trading session at 1.5883.
Earlier today, the Rightmove HPI was released. It showed that the asking price for homes on sales has fallen 2.6%. Last month, the average selling price of homes shot up 3.5%. It produced little impact on Cable’s price action.
No more data for the rest of the day, but prepare yourselves for MPC Meeting Minutes and report on Public Sector Net Borrowing on Wednesday. The MPC Meeting Minutes is widely expected to show that all 9 voting members opted to keep rates unchanged and NOT expand the central bank’s asset purchase facility. Meanwhile, the Public Sector Net Borrowing is anticipated to show a reading of -19.
With only one report on deck in the U.K. yesterday, the pound traded on risk sentiment. It gained 12 pips on the Greenback but lost 36 pips to the euro. What the heck caused the mixed price action?
Since there were barely any reports released from the major economies, investors concentrated on the fact that issues like the Greek default and the U.S. fiscal cliff haven’t escalated over the weekend. Optimism in the euro boosted EUR/GBP while risk appetite dragged on the low-yielding dollar.
Not everything is rosy in the U.K. though. The Rightmove house price index printed a decline of 2.6% in November, which is weaker than its 3.5% uptick in October.
No data will be released from the U.K. today, so pound pairs will most likely trade on news that usually affect risk appetite. Keep your eyes peeled for updates on the euro zone debt saga, aight?
The pound managed to sneak in a few gains against the Greenback yesterday as GBP/USD closed 13 pips above its 1.5903 open price. GBP/JPY had its fair share of winnings as it ended the day 5 pips above the 130.00 handle.
There were no reports released from the U.K. yesterday yet the pound was able to benefit from traders’ optimism that EU finance ministers would soon reach a decision on Greece. So far, no decision has been made yet and if the leaders disappoint, the pound might be forced to return some of its recent gains.
Another factor that could trigger a pound selloff today is the release of the BOE meeting minutes at 10:30 am GMT. Although the central bank seems inclined to ease, they are also concerned about rising inflation in the country, which could undermine further easing efforts. The minutes of their latest meeting could shed more light on how policymakers plan to resolve these matters so make sure you keep an eye out for the actual release!
And the pips just keep coming! For the fourth day in a row, the pound had its way with the dollar, as GBP/USD rose 33 pips to end at 1.5949. Can it keep its streak intact?
Surprisingly enough, the pound was able to power through and gain ground against its safe havencounterparts, even though its monetary policy meeting minutes were on the dovish end of the spectrum.
Apparently, policymakers voted 8-1 in favor of keeping asset purchases unchanged earlier this month, saying that although they’re split on the asset purchase facility’s impact on the economy, there are solid arguments for more easing. Still, it seems the BOE is in no rush to act, and it’s likely that the MPC won’t make any adjustments until 2013.
In other news, public sector net borrowing decreased less than expected last month, declining from 9.9 billion GBP to 6.5 billion GBP, instead of 4.1 billion GBP… not exactly what you want to see from a country that’s trying to bust its deficit!
Only tier 2 data (CBI Industrial Order Expectations at 11:00 am GMT) on tap today. So it’s best you keep track of risk sentiment if you’re looking to trade the pound. Good luck, fellas!
And the pound’s winning streak comes to an end! After rallying for four consecutive days against the Greenback, the pound ended the day in the red as GBP/USD closed at 1.5936. GBP/JPY also had its share of losses as it closed at 131.37.
The only piece of economic data from the U.K. yesterday, which was the CBI industrial orders report, came in weaker than expected. The actual figure climbed from -23 to -21 for November, falling short of the consensus at -19. Since the reading is still negative, this indicates that manufacturers are expecting lower order volumes for the month.
Only the BBA mortgage approvals report is set for release from the U.K. today and this is expected to print a slight increase for October. The reading is estimated to climb from 31.2K to 32.3K for the month, reflecting an increase in lending activity and housing market demand. Keep an eye out for the actual release at 10:30 am GMT because another weaker than expected figure could weigh the pound down.
There goes the 1.6000 handle! For the first time in weeks, GBP/USD ended the day above 1.6000 as risk appetite led price to break above this major psychological level. To end the week on a high note, the pound gained 96 pips against the dollar, taking the pair to 1.6032 before the weekend.
Confidence was up last Friday, and boy did the markets show it! Hopes that Greece will finally secure its next financial aid payment lifted higher-yielding currencies, leading to dollar weakness across the boards.
On the domestic front, the U.K. had some reason to celebrate as well. BBA mortgage approvals came in better than expected last month, clocking in at 33,000 (versus the consensus forecast of 32,300).
Nothing on the economic docket from the U.K. today, but the highlight of the week is just a day away! At 9:30 am GMT tomorrow, the revised GDP report will be available. Survey says we’ll likely see no changes to the 1.0% growth in Q3, but any revisions could (and will likely) result in sharp moves, so be sure to tune in when this report comes out.
With no data on tap, GBP/USD pretty much stuck within range to start the week. After trading as low as 1.5996 , GBP/USD eventually closed at 1.6017, down just 12 pips from its opening price.
Despite the lack of data, we did get a major surprise yesterday, as the Bank of England decided to appoint Mark Carney as the next BOE Governor. If that name sounds familiar, well, it should! That’s because that’s the same Mark Carney who’s the BOC Governor! This marks the first time in the 308-year history of the BOE that it’s appointed a non-British man as the head of central bank!
The reason why Carney was chosen was because the BOC didn’t want someone “tainted” by recent scandals of the London financial sector.
For today, we’ve got revised GDP figures due at 9:30 am GMT. Word on the street is that no changes are expected to be made from the preliminary figure of 1.0%. Still, you’d best be served to watch out when this report is released, as any unexpected change could send pound price action in either direction.
More of the same from the pound! After an entire day’s worth of trading, it ended practically unchanged against the dollar, finishing just 1 pip lower at 1.6017. When will GBP/USD give us something to work with??
Ironically, the revised GDP report yesterday offered no revisions, as estimates for U.K. growth in Q3 2012 remained at 1.0%. But on a more positive note, preliminary business investment clocked in at a higher-than-expected rate of growth last quarter, showing a 3.7% increase, rather than the 1.3% that was expected.
Hopefully we’ll get some sort of action on pound pairs today, even though the U.K. won’t be publishing any new reports. Right now, it appears that market sentiment is on the verge of shifting towards risk aversion, so watch out for any bearish moves on GBP/USD!
The pound pulled off a nice comeback yesterday, as it fell behind early but recovered late versus the dollar. After trading as low as 1.5962, GBP/USD rallied back and managed to end the day at 1.6016, down just one pip from its opening price. What gives?
Risk aversion from the announced Greek debt deal weighed on the markets early on, which led to a sell-off during the London session.
Worse-than-expected net lending to individuals figures didn’t help the pound’s cause either, as the report showed that lending dropped by 0.3 billion GBP. It was projected to rise by 0.9 billion GBP. While this figure doesn’t mean much by itself, if we start to see this trend lower, it would mean that consumers are having less access to loans, which slows down consumption. That said, just keep an eye on this report in the coming months to see what develops.
However, the pound bulls came back in force late in the New York session, as we saw a late rally. Hit up my U.S. commentary for the 4the lowdown on why this happened!
Today, we’ve got the Nationwide HPI coming in at 7:00 am GMT, with expectations being that housing prices rose slightly by 0.2%.
However, I don’t think that report will cause much of a ripple in the markets. Instead, I think market players are preparing for incumbent BOE governor Mervyn King’s speech. King will be speaking at the Financial Stability conference, and it’ll be interesting to see what he’s got to say in his first major event since the BOE announced that Mark Carney would be taking over the top post at the central bank in mid-2013. Watch out for his speech at 10:30 am GMT!
Who needs strong economic data when risk appetite has yo back? The pound chalked up another positive day against its counterparts yesterday despite the release of weak U.K. data. What’s up with that?!
The U.K.’s Nationwide house price index came in at 0.0% yesterday, a disappointment from the 0.2% growth that many were expecting. BOE head honcho Mervyn King didn’t help matters either, when he warned that big banks need more capital to fight potential losses.
Good thing that the CBI realized sales came in at a reading of 33 in November, since analysts were only expecting a reading of 19. Overall, the U.K. reports suggested that there’s still a lot of room for economic growth.
The GfK consumer confidence data already came out a couple of hours ago, and from the pound’s early price action, it looks like it’s in for another positive day. The report printed at -22, which is lower than the previous -30 reading.
No other reports from the U.K. today, so keep your eyes peeled for the euro zone reports as well as talks about the Fiscal Cliff!
So much for ending the week with a bang! Just when GBP/USD set a new weekly high at 1.6063 and seemed poised for new highs, the pair came crashing back down to finish at 1.6025, down 15 pips from its opening price. Can the pound bulls bounce back today?
The pound may get a boost from the manufacturing PMI report, which is scheduled for release at 9:30 am GMT. Word on the street is that the index will print a score of 48.1, up from the reading of 47.5 we saw last month. Take note that the report has printed below the make-or-break 50.0 mark 6 months in a row now. If it manages to creep back above 50.0, we may finally see a sustained pound rally!
Looking further ahead this week, the biggest red flag I see on our economic calendar is the BOE interest rate decision on Thursday. Now, no major changes are expected, but it always pays to listen closely during the accompanying statement.
Take note that this is the first MPC rate statement since the announcement that Mark Carney will be taking over the Bank of England head post in mid-2013. Who knows what might be said!
Out of the way! Pound bulls chargin’ through! GBP/USD skyrocketed on the charts yesterday, trading past resistance around 1.6050 before closing the day at 1.6095, up 87 pips from its opening price. Meanwhile, GBP/JPY closed with a 48-pip gain at 132.34.
Of course, with risk appetite up thanks to the recent developments in the euro zone as well as positive data released from the U.K., it was only natural for the pound to fly through the roof.
The manufacturing PMI report for November came out yesterday and it came in at 49.1. Not only was the reading higher than its previous figure of 47.3, it also topped the market’s forecast of 48.1.
With that said, make sure you keep tabs on the Europe. Any updates concerning the debt crisis may just fuel the happy vibes in the market and continue to boost risk appetite. Also be sure you don’t miss the U.K. construction PMI report due later at 9:30 am GMT. Analysts expect it to come in at 50.7, but if the report prints better than expected, we could see the pound trade higher!
For the first time in more than thirty days, Cable was able to push for new highs. The pair, which began the Asian trading session below the 1.6100 handle, had flown as high as 1.6131 before closing the day at 1.6105.
Cable rallied despite a weak Construction Purchasing Managers’ Index (PMI). The construction PMI yesterday showed that the business conditions for the month of November hinted at contraction. The reading fell to 49.3 from 50.9 the previous month.
Apparently, traders were bullish on the pound as Europe’s outlook continued to improve. Moreover, traders also bought up the pound due to their expectation that the Bank of England (BOE) will sit on its hand in its rate-setting meeting tomorrow.
Today, there are two major market-moving events. The first one is the release of the Services PMI. It’ll come out at 9:30 am GMT and it is expected to show a reading of 51.1. Last month, the reading was at 50.6.
The Autumn Forecast Statement of the British government will also be published. The statement provides an updated economic outlook and previews the government’s budget for next year, including expected spending and income levels, borrowing levels, and financial objectives. It’s scheduled to come out at 12:30 am GMT.
With the amount of high-profile events lined up today both from the U.K. and the U.S., I think volatility will be aplenty today. Good luck, traders!
Oh no! Resistance at the 1.6100 handle proved to be too much for the pound to handle once again. GBP/USD merely traded around the major psychological level before finishing yesterday’s trading 7 pips below its opening price at 1.6098.
But I guess the currency’s unimpressive price action shouldn’t come off as a surprise. After all, we heard quite a handful of bad news from the U.K.
For one, the country’s services PMI for November printed at its lowest since December 2010 at 50.2, disappointing the consensus at 51.1. Don’t get me wrong. The reading, being above the 50.0 baseline, still represents an expansion in the industry. However, it does mean that its growth is getting weaker and that might have enough to ruffle some feathers.
Chancellor of the Exchequer George Osborne also sounded pessimistic on his outlook for the British economy when he delivered his twice-a-year speech on fiscal policy. In his Autumn statement, he announced downward revisions to economic growth. Previously, GDP for 2012 was estimated to print an uptick of 0.8% but now, it is seen to come in at -0.1%.
On top of that, public debt as well as budget cuts are expected to rise in the coming years. Yikes!
Today will be probably be another interesting day for the pound with a couple of top-tier events on tap. We kick things off at 9:30 am GMT with the U.K. trade balance report for October which is anticipated to print a deficit of 8.7 billion GBP for the month.
Then at 12:00 pm GMT, the BOE is set to announce its monetary policy decision. As Forex Gump wrote in his blog, no one really expects the central bank to carry out any changes in its current policy. However, it would still be a good idea to be on your toes for the event. Who knows, BOE Governor Mervyn King tone in the bank’s statement could rock the pound.
Similar to other European currencies, the British pound suffered the wrath of the safe haven U.S. dollar yesterday. GBP/USD finished the U.S. trading session at 1.6047 after it had opened the day at 1.6098.
As widely predicted the Bank of England (BOE) opted to leave the benchmark interest rate unchanged at 0.50% and maintain the size of its asset purchase facility at 375 billion GBP yesterday. Focus will now shift to what was actually talked about in the meeting. Expect to see the minutes two weeks from now, on December 19.
In other news, the Halifax HPI came in slightly better than expected yesterday. It showed that the selling prices of homes financed by the Halifax Bank of Scotland rose 1.0% in November. The market had only projected a tiny 0.2% increase. The country’s Trade Balance was disappointing though. It reported a 9.5 billion GBP deficit for October, higher than the 8.7 billion GBP deficit consensus.
Today, the main report you should keep tabs on is the Manufacturing Production. It’s projected to print a 0.2% decline for October, opposite the meager 0.1% rise seen in the previous reporting period. The actual result will come out at 9:30 am GMT.
Not so fast, pound bears! Just when we thought that the weak U.K. data would weigh on the pound, risk appetite soon saved the currency bulls’ day. Cable capped the day 30 pips higher than its intraday low while Guppy only slipped by 3 pips.
The pound bulls got the tug-o-pip party started during the U.K. session when the manufacturing production numbers were released. The data revealed a 1.3% drop in October, which is faster than the 0.2% expected downtick and September’s 0.0% reading. Apparently, weaker food and alcohol demand as well as softer mining and oil production had hurt production during the month.
Fortunately, currency traders were all gung ho about the better-than-expected employment data from the U.S. High-yielding currencies rallied during the New York session, helping the pound recover most of its intraday losses against its counterparts.
BOE Governor Mervyn King is scheduled to take center stage today at 6:15 pm GMT and traders will most likely look for his plans before he gives up his spot for Mark Carney and his and thoughts on adding more stimulus to the economy.
No other report is scheduled for release today, so keep close tabs on investor sentiment and see if the currency bulls can hold up the risk rally that we saw last Friday.
Good luck and good trading, kids!
No market data? Who cares! Despite the absence of economic reports, Cable still found a reason to rally strongly yesterday. The pair, which started out the day at 1.6047, closed the U.S. trading session 36 pips higher at 1.6070.
Apparently, risk appetite was the name of the game yesterday as U.S. stocks took a step higher. The DJIA index rose slightly by 14.75 points while the S&P 500 also ticked 0.48 points higher. In the euro zone, Greece reported that the bond buy-back program went superbly and is very close to completion.
Earlier today, the RICS House Price Balance survey was released. It showed that the housing market is starting to stabilize as 9% of surveyors reported falling house prices in November. In addition, surveyors are also positive that the number of sales should gradually grow over the coming quarter.
No major data left on U.K.’s economic calendar so the pound’s price action will probably be dictated by market sentiment just like yesterday. Keep a close eye on data from other major economies, as good data could once again trigger risk appetite and lead to a rally in Cable.