The pound took another nasty spill just before the weekend as Cable recorded a 174-pip drop. Will the bears remain in control this week?
It was another bloodbath for pound traders – Friday was marked by red candlestick after red candlestick! With the BOE’s dovish rate statement still ringing in traders’ ears and the U.S. publishing stronger-than-anticipated NFP results, the pound never really stood a chance against the dollar. It began the day by trading at 1.5075 and then proceeded to slide down without ever looking back.
Will it recover this week?
Well, it’ll have to do so with little support from U.K. data, as the only tier 1 report due this week is the manufacturing production report scheduled for 8:30 am GMT tomorrow. In the meantime, if you’re looking for your fix of U.K. news today, tune in at 11:01 pm GMT for the BRC retail sales monitor, which printed an increase of 1.8% the last time it came out.
It was a slow crawl but hey, a win’s a win! GBP/USD slowly crept up the charts, finally ending the day around 1.4950, up nearly 100 pips from the day’s lows.
Thanks to an improvement in risk appetite, higher yielding currencies like the pound stood taller yesterday and erased some of last week’s losses.
Earlier, the BRC retail sales report also provided some support for the pound, as it printed a 1.4% increase in monthly sales. This was a nice follow up to the 1.8% we saw the previous month. It remains to be seen though, whether this will help buoy the pound to new highs.
The big report to keep an eye on today will be the manufacturing production report due at 8:30 am GMT. Word on the street is that production rose by 0.3%, which would be a complete reversal from the 0.2% decline we saw the month before. An exceptionally better than anticipated result could help give the bulls more ammunition to keep firing away.
Also due at 8:30 am GMT will be trade balance figures, which are projected to show a deficit of 8.4 billion GBP.
Lastly, the NSIER GDP estimate will be made available at 2:00 pm GMT. Keep in mind that while it is released monthly, it tracks GDP growth on a quarterly basis, meaning its estimate covers the previous three months. Last month’s release clocked in at 0.6%, which actually marked the third consecutive month that the report printed positive growth. Will today’s report extend the winning streak to four?
Ka-pow! The pound got hit with a triple roundhouse kick yesterday as weak reports from the U.K. inspired a selloff. Cable finished the day with at least an 80-pip loss while GBP/JPY also saw a 53-pip decline.
The pound started the London session on the wrong side of the charts when the U.K. reports scheduled that day ALL printed weaker-than-expected. For one thing, the manufacturing production numbers fell by 0.8% in May thanks to a drop in output from the manufacturing and pharmaceutical sectors.
The trade balance report also printed a deficit of 8.5 billion GBP, which is wider than April’s 8.4 billion GBP reading. Last but not the least, the country’s industrial production printed a flat reading instead of the expected 0.3% uptick. Talk about having a bad day!
The U.K. isn’t expected to print any economic report today, so keep an eye out for possible profit-taking ahead of the FOMC meeting minutes. Events in the euro region could also affect the pound’s price action, so watch your trades closely!
It’s payback time! The pound took back most of its recent losses against the Greenback, as GBP/USD landed back above the 1.5000 major psychological level and even climbed 7 pips shy of the 1.5200 handle. Is it in for more gains today?
Even though there were no economic reports released from the U.K. yesterday, the pound was able to take advantage of the dollar weakness that took place after the minutes of the FOMC meeting were released. Apparently, there was a lot of dissent from a number of Fed officials regarding Bernanke’s proposed stimulus taper schedule, convincing market watchers that the plan to reduce bond purchases by the end of the year isn’t a done deal yet.
The economic schedule of the U.K. is still mostly empty for today, as the only event is MPC member Miles’ speech at 9:30 am GMT. Dovish remarks from this BOE policymaker could force the pound to retreat while upbeat comments could allow GBP/USD to break past 1.5200. Stay on your toes!
What a day for the pound! Riding the wave of dollar selling throughout the day, GBP/USD rose an astounding 275 pips to finish the day a shade below the 1.5200 handle. Can the pound bulls continue their good fortune today?
Pretty impressive move for the pound bulls, especially when you factor in that we didn’t really have any major market moving events on tap to spur the buying frenzy.
The only event of note was MPC member David Miles’ speech, where he talked about the Funding for Lending scheme by the BOE. Still, he didn’t mention anything that would have given market players reason to act.
Nothing lined up for today, so you’ll have to take you trading cues from releases from other countries. Just be sure to practice good risk management techniques and keep those stop losses in check!
All good things come to an end. After a very strong performance on Thursday, Cable suddenly faltered and gave up a lot of ground on Friday. The pair was sold heavily throughout the day, ending the U.S. trading session almost 100 pips lower from its opening price. It started at 1.5196 and closed at 1.5104.
The only piece of data that was released was the CB Leading Index. It came in with a 0.4% increase, which was slightly higher than the 0.2% rise seen the month before. A rising CB Leading Index is normally considered as positive for the domestic currency as it means that the direction of the economy is upwards.
This week, there are a number of important economic releases scheduled to come out. I’ve listed them below together with their corresponding forecasts:
[B][I]Tuesday[/I]
[/B]
Consumer Price Index: 3.0% forecast, 2.7% previous
Bank of England (BOE) Inflation Letter: If CPI comes in greater than 2.0% central bank target, BOE Governor Mark Carney will have to explain to the British Parliament what happened
[B][I]Wednesday[/I]
[/B]
Claimant Count Change: -7,900 forecast, -8,600 forecast
BOE Interest Rate Decision - Expected to show a 2-0-7 split (2 in favor of increasing the QE program and 7 opting to keep it unchanged)
[B][I]Thursday[/I]
[/B]
Retail Sales Report: 0.4% forecast, 2.1% previous
While there is a boatload of potential catalysts heading our way, the BOE Interest Rate decision will probably be the biggest one. If the BOE shows that it’s likelier to ease than what the market thinks, we could see Cable reverse its gains from last week.
After trading as low as 1.5027, the pound staged a comeback against the dollar in the London session and eventually managed to close just 3 pips below its opening price at 1.5105. Against the yen, it had much better luck as GBP/JPY rose 77 pips and finished at 150.65.
No new stories from the U.K. yesterday, but that won’t be the case today as the monthly CPI is set for release at 8:30 am GMT.
Inflation is expected to post a strong increase for the month of June – the CPI is anticipated to hit 3.0% up from just 2.7% a month prior. A high reading from this report could serve as a strong reason for the BOE to refrain from further easing and provide the pound with a bit of support.
Don’t even think of missing this one, homies! This report has been known to cause 50-pip swings on GBP/USD!
Look who’s back in Loserville! The pound bears meant business yesterday as they dragged the currency significantly lower against the euro, yen, and the Aussie. Fortunately, an overall dollar weakness had pushed Cable up 12 pips from its intraday low.
Yesterday the U.K. printed its inflation numbers, which showed that summer discounts had dragged the monthly CPI by 0.2%. What made investors pay attention though, was the annualized CPI figure, which came in at 2.9% instead of the expected 3.0% growth. The number hinted that the BOE has room for more easing, which probably explains why the pound had weakened across the board.
As eventful as the previous day has been for the pound, the action isn’t over yet. At 8:30 am GMT we’ll see a slew of economic data that includes the U.K.’s latest employment numbers as well as the Monetary Policy Committee’s meeting minutes. Pay close attention to how newcomer BOE Governor Mark Carney will vote as his vote on the bank’s stimulus programs will probably signal just how aggressive the central bank will be in the foreseeable future.
Good luck and good trading!
It seems that it was the King weighing down the pound after all! After a report showed a sudden shift in voting results in the MPC, the pound soared up the charts, with GBP/USD soaring up to as high as 1.5268, before finally settling at 1.5212, up a solid 55 pips on the day.
After consistent voting results of 6-3 the past few months, yesterday’s 9-0 result in favor of maintaining asset purchases at 375 billion GBP certainly came as a surprise for the pound bulls.
Take note that one of the three who voted for an expansion was former BOE Governor King, so it was anticipated that we’d likely see at least one vote (belonging to Carney now) would be swung the other way. What was a surprise though was that the two other members who previously voted for expansion of bond purchasing, Miles and Fisher, are now back in the hawks camp!
This was also a different tone that what was expressed during the actual statement, when Carney’s first MPC statement was considered to be somewhat dovish, as he signalled an extended period of low rates.
The pound also got a boost from better than expected claimant count change results, which printed a decline of 21,200 in jobless claims, way more than the anticipated 7,500 drop. Not only was this best figure in nearly three years, but it also brought down the jobless claims rate to its lowest level in four years! Meanwhile, the unemployment rate remained steady at 7.8%.
Can the pound bulls sustain their momentum today? Watch out for the U.K. retail sales data set to be released at 8:30 am GMT. Expectations are that retail sales barely grew last month and will register a measly 0.2% increase. Pay attention though, because a higher than expected growth figure could give the pound another boost up the charts!
Back-to-back, baby! The pound enjoyed another trip up the charts yesterday despite a slightly lower-than-expected data from the U.K. The pound shot up against the euro, yen, and the Aussie, while Cable also showed a healthy recovery from its intraday lows.
The pound probably could have showed more gains if only the U.K.’s retail sales had painted a better picture. Consumer buying only grew by 0.2% in June, which just meets its expectations but is still slightly lower than May’s 2.1% growth.
Will the pound go for three today? The only data scheduled is the public sector borrowing numbers, which is seen to go down from 10.5 billion GBP in May to 9.4 billion GBP in June. Oh, and don’t forget to pay attention to other news in the region, aight? You’ll never know when the pound could trade on risk sentiment!
Mark another one down for the pound! The British currency ended the week on a high note as Cable marched higher for the fourth straight day. The pair traded as low as 1.5196 before it staged a solid rally to 1.5274, marking a 50-pip win on the day.
The pound shrugged off the disappointing public sector net borrowing report with ease. Not only was the May figure revised up from 10.5 billion GBP to 12.8 billion GBP, but June also missed forecasts and recorded borrowings of 10.2 billion GBP (versus 9.4 billion GBP expectations).
This week, the only major release that we can look forward to is the preliminary GDP report, which is set to come out on Thursday. Analysts are feeling optimistic about Q2’s growth and are forecasting an expansion of 0.6%, which is twice the rate of Q1. With the markets expecting a strong figure, there’s a chance we’ll see demand for the pound pick up in the days leading to the release, so watch the pound closely, homies!
The pound was sought after like ice cold lemonade on a hot summer’s day. Despite the lack of economic data during Monday’s trading, GBP/USD was able to extend its gains when it closed higher from 1.5270 to 1.5358.
It would seem that the currency still benefitted from the BOE MPC meeting minutes released last week. If you remember, the report showed that there was a consensus among British policymakers to keep the amount of asset purchases steady. All 9 MPC members voted for no change in the last meeting. This is the first time we’ve seen this happen in three months!
I wonder if there’s still enough good vibes left to fuel the pound’s rally in today’s trading given that we only have the second-tier BBA mortgage approvals report on tap (due at 8:39 am GMT with the forecast at 38,500). What do you think?
Mixed trading for the pound, which edged higher versus the Greenback but took a tiny hit versus the euro. What could be in store for all you pound traders today?
BBA mortgage approvals ticked in at 37,300, just slightly below the anticipated 38,500. Nevertheless, this had a minimal impact on GBP trading, as it still marked a slight improvement from last month’s 36,300 figure.
I suspect we could see more range like behaviour, at least on GBP/USD, as we’ve only got the CBI industrial expectations report due at 10:00 am GMT. The index is projected to have improved slightly, from -18 to -12, which could provide the pound with some decent support later during the London session.
Do watch out though for the euro zone PMIs headed our way! This could shift risk sentiment in either direction, so make sure to pay close attention when they hit the market!
And that ends the pound’s reign as king of the charts! For the first time in a week, GBP/USD closed lower, as it finished 70 pips lower at 1.5309. Will yesterday prove to be the turning point for Cable or is this merely a breather for the bulls?
The CBI Industrial Orders Expectation index came in as expected, printing a score of -12. While this was still below the key 0.0 mark, it did mark a decent improvement from the -18 reading we saw last month.
Part of the reason why the pound may have been weaker was due to a strong performance by the euro that lead to a rise in EUR/GBP. With euro zone PMIs surprising to the upside, many traders may have shifted their holdings towards euro-denominated assets as opposed to pound ones.
The pound bulls could strike back today though, as preliminary GDP figures will be released at 8:30 am GMT. Word on the street is that we should see quarterly growth clock in at 0.6%, which would be double the 0.3% mark we saw during Q1 2013. Should the actual release beat expectations, we could see a nice rally by the pound.
Talk about a topsy turvy day! The pound traded higher ahead of the much-anticipated U.K. GDP report only to get sold off when the official data came out. GBP/USD dropped like a rock from 1.5387 to 1.5265! However, the currency quickly regained its composure and the pair settled 84 pips above its opening price at 1.5394.
Yesterday we found out the U.K. growth doubled in the second quarter. The GDP report printed just as expected at 0.6%. Markets might have been expecting a better figure, given the BOE’s recent optimism about its FLS scheme, which could help explain why the pound initially got sold off.
I think that the effects of today’s GDP report will continue to linger in the markets given that we have nothing coming out of the U.K. But that’s just me! What do you think?
What a choppy day! GBP/USD moved mostly sideways on Friday, as it jumped to a high of 1.5434 then dipped to a low of 1.5356. Meanwhile, GBP/JPY ended the day in the red as it tumbled to the 151.00 area. What’s in store for the pound today?
There were no reports released from the U.K. on Friday, leaving GBP/USD to react to U.S. data and GBP/JPY to be affected by reports from Japan. Unfortunately for GBP/JPY, Japanese CPI figures came in better than expected, boosting demand for the yen.
For today, the U.K. is set to print a bunch of medium-tier reports. These are the net lending to individuals, mortgage approvals, and CBI realized sales. Net lending is expected to pick up pace from 1.0 billion GBP to 1.4 billion GBP while mortgage approvals could rise from 58K to 60K in June. CBI realized sales are also expected to improve, as the index could increase from 1 to 11 for July.
If you’re planning on trading the pound pairs, you might be better off waiting for additional volatility during the latter half of the week, as the BOE will make its interest rate statement on Thursday. Good luck!
Monday shaped up to be a bad day for the pound. After opening the day at 1.5384 versus the dollar, the pound trickled slowly throughout the day, ending the U.S. trading session at 1.5350.
Economic data released during the day were mixed. On the positive side, the Mortgage Approvals report came in worse than expected. It only showed an increase of 58,000, which was slightly lower than the 60,000 rise the market had initially forecasted. The CBI Realized Sales, on the other hand, managed to beat the estimate. It printed a reading of 17, six whole points higher than anticipated.
The U.K.'s economic docket today is pretty light, as no tier 1 event is scheduled to happen. This means that we will probably see Cable range today as traders sit on the sidelines ahead of the high profile events lined up on Wednesday, Thursday, and Friday. Watch the major support and resistance levels today folks. They could very well hold!
Ka-blam! The pound got slammed across the board yesterday as traders positioned themselves ahead of the BOE’s monetary policy decision. GBP/USD and GBP/JPY ended the day in the red while EUR/GBP popped up to last week’s highs.
The pound might have gotten a better chance if investors had only paid attention to the U.K.’s economic data. Yesterday we saw the GfK consumer confidence come in at -16, which is a bit less pessimistic than the expected -19 and last month’s -21 reading. The BRC shop price index didn’t do much for the pound though, as it printed at -0.5% after already falling by 0.2% last month.
We won’t see any report coming out of the U.K. today, so the pound will most likely trade on speculations about what the BOE or the Fed will say in their monetary policy statements this week. These events will be closely watched by many traders, so keep an eye out for extra volatility during the releases!
What a day! The pound had an exhilarating trading day against the dollar on Wednesday. GBP/USD opened at 1.5242 and traded lower until it bottomed out at 1.5126. Pound buyers then stepped up their game, pushing the pair to an intraday high of 1.5255 before closing at 1.5213.
Our forex calendar was blank for data from the U.K., leaving the pound vulnerable to market sentiment. It looks to me that traders might have decided to limit their risks as we go into the BOE MPC rate statement today.
At 11:00 am GMT today, British policymakers are expected to make no changes to the central bank’s rate decision and asset purchase facility. However, be on your toes for remarks about their future plans. If you remember, the last BOE rate decision sent the pound lower on the charts as BOE Governor Carney hinted that no rate hikes will happen within the next couple of years. Forex Gump made a detailed blog on what to expect from the BOE Rate Decision so make sure you read it before you decide to trade the pound!
We’ll probably see volatility pick up ahead of the release though with the release of the manufacturing PMI (seen at 52.8).
Be careful and good luck, folks!
The upside surprise in the manufacturing PMI was powerless to stop traders from selling the pound. With the BOE keeping its monetary policy unchanged, GBP/USD had difficulty finding buyers as it slipped from 1.5213 to 1.5118.
The manufacturing PMI may have unexpectedly surged from 52.9 to 54.6 (versus forecasts that called for a drop to 52.8), but from the way the markets reacted, you would’ve never guessed! They dumped the pound even though the manufacturing industry posted its most impressive performance in over two years!
The reason behind the strong bearishness for the pound was the BOE rate statement, which revealed that the central bank has no plans to adjust up its monetary policy and record low interest rates. Of course, it didn’t help GBP/USD that the U.S. published some impressive manufacturing numbers of its own.
With the rate decision finally behind us, we only have a couple of reports left for the week. The Nationwide HPI is slated to print a 0.4% rise at 6:00 am GMT. Meanwhile, the construction PMI is expected to rise from 51.0 to 51.6 when it comes out at 8:30 am GMT. These reports may help the pound recover some of its losses from yesterday, so tune in when they come out!