GBPUSD news - page 55
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UK Mortgage Loans Rise Slightly Below Estimate
Rising house prices do not seem to be deterring buyers' appetite as the number of mortgage approvals for house purchases continue to rise while the rates remain at record lows.
In May, the number of mortgage approvals rose to a 14-month high of 42,530, up from 42,020 in April, but less than estimated, according to the British Banking Association (BBA) credit report published on Wednesday.
"The increase in mortgage approvals this month is consistent with the trend we’ve seen since the start of the year. The numbers show that the property market remains buoyant after the general election. Fierce competition between lenders means that there are some great mortgage deals available from the high street banks," Richard Woolhouse, chief economist at the BBA, said.
The latest Bank of England (BoE) credit report, data showed the number of secured loans for house purchases rose to 68,076 in April, the highest number since February 2014. The BoE's credit data for the month of May are due June 29.
The UK housing market is rebounding notably after months of subdued activity caused by pre-election political and economic uncertainty. Increased market confidence and a chronic lack of housing supply has led to house prices rising again in most parts of the UK.
House prices in the UK began to surge again after the May general election, with the average asking price increasing by a record high 3%, or £8,500, between May and June, according to the top property portal Rightmove.
The BoE has been monitoring the UK housing market very closely, seeing the increasing burden of households debt as one of the significant risks to financial stability once interest rates begin to increase.
Economists now expect UK house prices to continue rising notably both in 2015 and 2016 after slowing last year. In one of his most recent comments, IHS Global Insight's chief economist Howard Archer said house prices are expected to rise a further 6% in 2015, adding there is "a significant upside risk to these forecasts coming from the current lack of properties coming on to the market."
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GBP/USD almost unchanged ahead of U.S. data
The pound was almost unchanged against the U.S. dollar on Thursday, hovering close to one-week lows as investors eyed the release of upcoming U.S. personal spending and jobless claims data for further indications on the strength of the economy.
GBP/USD hit 1.5677 during European morning trade, the session low; the pair subsequently consolidated at 1.5696.
Cable was likely to find support at 1.5622, the low of June 17 and resistance at 1.5806, Wednesday's high.
The dollar found support after the Commerce Department reported on Wednesday that U.S. gross domestic product contracted at a rate of 0.2% in the three months ending March 31, in line with expectations and compared to a previous estimate of a 0.7% contraction.
Meanwhile, market sentiment remained under pressure after late night talks between Greek Prime Minister Alexis Tsipras, the European Commission, the European Central Bank and the International Monetary Fund ended without agreement on Wednesday.
Discussions were expected to resume in Brussels on Thursday morning, ahead of a Eurogroup meeting of euro zone finance ministers scheduled later in the day.
Tsipras had told associates on Wednesday that some of Greece's latest proposed reform measures had not been accepted by creditors.
Greece has to repay € 1.6 billion to the IMF on June 30 or face going into default, which could trigger the country’s exit from the euro area.
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GBP/USD forecast for the week of June 29, 2015
The GBP/USD pair fell during the bulk of the week, but found enough support just below the 1.57 level to turn things back around. Having said that, looks like the market is ready to continue going higher and as a result we are buyers. We believe that the market will target 1.60 and then the 1.70 level given enough time. We believe that as long as we remain above the 1.55 handle, the market should continue to go higher over the longer term. We have no interest in selling at this point.
GBP/USD weekly outlook: June 29 - July 3
The pound was little changed against the dollar late Friday, but gained ground against the broadly weaker euro as uncertainty over Greece’s debt negotiations sapped investor demand for the single currency.
GBP/USD was at 1.5746 late Friday, almost unchanged for the day. EUR/GBP slid 0.3% to one-month lows of 0.7084.
Investors remained on the sidelines of currency markets amid uncertainty over whether Greece could reach an agreement with its international lenders in time to avert a default.
Greece’s bailout is due to expire on Tuesday, the same day that Athens is due to repay €1.6 billion to the International Monetary Fund, but without a rescue package in place Greece will almost certainly default.
In the week ahead, investors will be focusing on developments in Greece after Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout program.
European finance ministers refused a request from the Greek government to extend the bailout program until after the referendum.
The European Central Bank decided Sunday to continue providing emergency liquidity assistance to Greece’s banks, but capped emergency funding at current levels. The ECB said it was monitoring the situation and stood ready "to reconsider its decision."
Greek officials were to hold talks later Sunday to discuss measures to avert a mounting crisis in the banking sector after deposit outflows accelerated over the weekend.
Market participants will also be looking ahead to the latest U.S. employment report, due for release one day ahead of schedule on Thursday, for signs of improvement in the labor market, which the Federal Reserve has said is a key factor in deciding when to start hiking interest rates.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
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U.K. net lending to individuals rises less than forecast in May
Net lending to individuals and households in the U.K. rose less than expected in May, reflecting weaker demand for credit, official data showed on Monday.
In a report, the Bank of England said total net lending to individuals increased by ₤3.1 billion last month, below forecasts for ₤3.3 billion and up from ₤2.9 billion in April.
Net secured lending rose by ₤2.1 billion in May, above expectations for an increase of ₤2.0 billion, after rising by ₤1.7 billion in April.
Net consumer credit, including personal loans, overdrafts, and credit card lending, increased by ₤1.0 billion, below forecasts for ₤1.1 billion and compared to ₤1.2 billion in April.
Meanwhile, the M4 Money Supply increased by a seasonally adjusted 0.5% in May, in line with expectations and following a gain of 0.4% in April.
The report also showed that the number of final mortgage approvals fell to 64,430 in May from 67,580 in April. Economists had expected mortgage approvals to rise to 68,700 last month.
GBP/USD was trading at 1.5703 from around 1.5701 ahead of the release of the data, while EUR/GBP was at 0.7059 from 0.7058 earlier.
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U.K. Economy Grows Faster Than Previously Estimated at 0.4%
Britain’s economy had more momentum than previously estimated in the first quarter.
Gross domestic product rose 0.4 percent, the Office for National Statistics said in London on Tuesday, revising its previous figure of 0.3 percent. A separate report showed the current account deficit narrowed to 26.5 billion pounds, or 5.8 percent of GDP.
The economy has grown for nine straight quarters, helped largely by domestic demand, though the recovery remains uneven with net trade continuing to act as a drag. As Greece’s debt crisis casting a pall over Europe, Chancellor of the Exchequer George Osborne said on Tuesday that the potential impact of a Greek exit from the euro area shouldn’t be underestimated.
The Bank of England has previously issued a warning about the current-account gap, saying in April that it could, “in adverse circumstances, trigger a deterioration in market sentiment.” The current account deficit amounted to 5.9 percent of GDP last year, the most since records began in 1948.
Consumer spending rose 0.9 percent in the three months through March, and business investment grew 2 percent. Exports rose 0.4 percent and imports increased 2.3 percent. Net traded subtracted 0.6 percentage point from growth.
The upward revision to GDP was largely due to methodological changes in construction. Services, the largest part of the economy, grew an unrevised 0.4 percent.
The report also showed the saving ratio, the amount of disposable income households set aside rather than spend, fell to 4.9 percent from 5.9 percent. Real household disposable income rose 0.2 percent.
The compensation of employees fell 0.5 percent, the most since 2012. The fall was largely due weaker social-benefit contributions, though wages and salaries also declined.
GBP/USD slips lower after U.K. PMI disappoints
he pound slipped lower against the U.S. dollar on Wednesday, after data showed that U.K. manufacturing activity expanded at the slowest rate in 26 months in June, while Greek debt concerns continued to support demand for the safe-haven greenback.
GBP/USD hit 1.5676 during European morning trade, the pair's lowest since June 29; the pair subsequently consolidated at 1.5677, shedding 0.21%.
Cable was likely to find support at 1.5622, the low of June 17 and resistance at 1.5788, the high of June 29.
Research group Markit reported on Wednesday that the U.K. manufacturing purchasing managers' index fell to 51.4 last month from 51.9 in May, whose figure was revised from a previously estimated reading of 52.0.
Analysts had expected the index to rise to 52.5 in June.
Meanwhile, the dollar remained supported after the International Monetary Funf confirmed that the Greek government failed to make a scheduled €1.6 billion loan repayment by close of business on Tuesday.
The fund said Greece can now only receive further funding after its arrears are cleared. Greece asked for a last-minute repayment extension on Tuesday, which the fund said it will consider "in due course."
A default by Greece wiIl add to fears over the country’s solvency and fuel doubts over the condition of Greek banks and the collateral they use for European Central Bank loans.
Euro zone finance ministers were to hold discussions later Wednesday but German Chancellor Angela Merkel has ruled out further negotiations until after Sunday's referendum in Greece on whether to accept the terms proposed by lenders for extending the country’s bailout.
Sterling was higher against the euro, with EUR/GBP slipping 0.27% to 0.7082.
Also Wednesday, Markit said that Germany's manufacturing PMI remained unchanged at 51.9 last month, in line with expectations.
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GBP/USD: Savvy Dollar Cracks Support & Pushes Cable to 3-Wk Low
The greenback finally did it on Wednesday, showing extra power one day after Greece missed a $1.6 billion repayment to the International Monetary Fund (IMF), while the data-busy morning in the US took care of business for the currency.
"The market reaction is saying that we are shifting toward a more market-friendly outcome with regard to Greece," Westpac senior currency strategist Richard Franulovich mentioned.
Leaving riddles behind, the strengthening buck managed to push the cable below its two-week support line at 1.5660, where the GBP/USD cross patiently waited after reaching the eight-month high at 1.5930 seen on June 18.
In the afternoon, the cable dipped 0.67% to trade at $1.5604, the lowest level since June 16, while the buck rose also against its major peers, which was reflected in the soaring US dollar index, trading 0.66% elevated at 96.38 points.
Cheerful NFP warm-up
Shortly before the US opening bell, the non-farm payrolls' warm-up, i.e., the ADP employment change posted a better-than-expected figure of 237,000 in June, increasing from 201,000 booked previously.
Later during the day, the ISM factory PMI hit a six-month high at 53.5 in June, after 52.8 booked in May, while Markit Economics reached a figure of 53.6 points in June. However, the latest update of the manufacturing PMI still showed muted activity, slightly above the 50.0 point expansion threshold, hovering at the twenty-month low in June.
Factories gloom in the UK
Meanwhile in the UK, the macro calendar showed no mercy to sterling as the PMI manufacturing dropped more-than-expected to 51.4 points in June, sinking to the twenty six-month low, after 51.9 seen previous month.
Apart from the factory data, Bank of England Governor Mark Carney held a press conference about the Financial Stability Report in London.
"The United Kingdom is relatively well insulated from the direct consequences of events in Greece. UK banks’ exposures to Greece are very small relative to their capital bases," Carney said.
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U.K. Manufacturing Growth Weakest In More Than 2 Years
British manufacturing sector expanded at the slowest pace in more than two years in June as production and new orders logged slower growth, survey results from Markit Economics showed Wednesday.
The seasonally adjusted Markit/Chartered Institute of Procurement & Supply Purchasing Manager's Index dropped unexpectedly to 51.4 in June from revised 51.9 in May. Economists had expected the index to rise to 52.5 from May's initially estimated value of 52.
Nonetheless, the index remained above 50 no-change level for 27 consecutive months suggesting expansion in the sector.
June's disappointing PMI report suggested that the industrial side of the economy is playing no role in the economic recovery at the moment - indeed, it may even have dragged on overall GDP growth in the second quarter, Vicky Redwood, chief UK economist at Capital Economics, said.
Data revealed that production increased in June at the slowest pace since April 2013.
Domestic market conditions held up relatively well in June, leading to higher inflows of new business. Still companies reported that new export orders fell on the back of subdued demand from Europe-partly due to the sterling exchange rate.
Rob Dobson, a senior economist at Markit said, export trade is likely to remain a drag on the economy, given the uncertainty surrounding the Greek debt crisis.
This makes it difficult to gauge fully any possible knock-on effects for the UK's trade with the euro area particularly in relation to impact from the euro-sterling exchange rate, the economist added.
Manufacturing employment increased for the twenty-sixth successive month in June. But the pace of job creation remained below the average for the current sequence of growth.
GBP/USD: Cable Edges Higher on Positive Construction PMI
The latest UK construction PMI for June improved from 55.9 to 58.1, Markit informed traders on Thursday.
Following the release, the currency pair jumped above the $1.56 handle, adding around 40 pips while market participants anticipate higher volatility later in the session.
On Wednesday, the manufacturing PMI for June in the UK decreased to 51.4 from 52.0 in May, Markit informed on Wednesday.
Friday's UK services PMI for June will also be watched. Analysts are expecting it to improve from 56.5 in May to 57.5 currently.
Traders await the US payrolls numbers for June, which are expected to post 233,000 jobs created, down from 280,000 in May, but still decent growth. The unemployment rate is predicted to tick lower from 5.5% to 5.4%.
Moreover, average hourly earnings will be published, with the yearly change expected to stay at 2.3% growth.
"We certainly see no reason to believe the data will disappoint today with every piece of labour market data pointing to strength. Our own BTMU NFP model is estimating a payrolls gain of 253K. The consumer confidence data this week is the latest strong data with the ‘jobs plentiful minus jobs hard to get’ rising sharply from -6.6 in May to -4.3 in June – a measure when rising that correlates well with a falling unemployment rate. What we can’t be as sure of is the market reaction," analysts at Bank of Tokyo-Mitsubishi wrote in a note on Thursday.
Bank of England Governor Mark Carney held a press conference on Wednesday about the Financial Stability Report in London.
"The United Kingdom is relatively well insulated from the direct consequences of events in Greece. UK banks’ exposures to Greece are very small relative to their capital bases," Carney said.
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