GBPUSD news - page 107
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GBPUSD trades below 1.2100 level
The post crash low is the next target ahead of open road
September 2016 UK BBA mortgage approvals 38,252 vs 37,350 exp
September 2016 UK BBA mortgage approvals 26 October 2016
UK Q3 GDP Stronger Than Expected At 0.5%, Structural Concerns Persist
The first estimate from the Office of National Statistics, recorded an increase in GDP for the third quarter of 0.5%. Although this was a slowdown from the 0.7% seen for the second quarter, it was significantly above consensus expectations of a 0.3% gain.
The annual growth rate was 2.3% compared with an expected reading of 2.1%.
Growth was led strongly by the services sector, which registered growth of 0.8% in the three-month period, the strongest rate of growth for 2016. In contrast, there were contractions in all the other three sectors with construction registering a 1.4% decline, the sharpest decline since the third quarter of 2012.
Production contracted 1.0% after the 2.1% gain for the second quarter, while agriculture contracted for the third successive quarter.
The ONS stated that there had not been a major impact on the data from the EU referendum vote, although it was too early to be confident over the longer-term implications.
The third-quarter data was also stronger than the Bank of England’s revised forecast of 0.3% contained in the previous monetary statement and the release will trigger a further upgrade, which will further lessen the potential for the Bank of England to cut interest rates again at the November meeting.
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UK data - GfK consumer confidence (October): -3 (prior -1)
Consumer confidence
GBP/USD forecast for the week of October 31, 2016
The GBP/USD pair went back and forth during the course of the week, forming a fairly negative candle. Because of this, the market looks as if it is trying to break down below the 1.20 level, an area that is massively supportive. If we do break down below there, it’s likely that we will continue to go down to the 1.15 handle. Rallies should continue to be selling opportunities, and with that being the case it is likely that buyers will continue to be on the back foot as there is so much bearish pressure.
GBP/USD Weekly Forecast October 31-November 4
The Sterling posted a small loss against the Greenback in the past week to mark the second week of low volatility. The upcoming week contains several risk events that will move the currency pair. The Bank of England and the Federal Reserve will both deliver their latest policy decision. With diverging monetary policy amongst the two central banks, there is potential for a continuation lower in the week ahead, with technical indicators also pointing to a bearish scenario.
The Federal Reserve will release their cash rate and latest monetary policy statement on Wednesday. This will be their last policy statement ahead of the December meeting for which expectations have been building for a rate increase.
Probabilities of a December rate hike moved up to 73.9% at the end of the week, up from 69.5% at the end of the prior week. There will be some expectation for the Fed to provide a stronger signal for an upcoming rate hike, even if there is an element of data dependence attached to the rhetoric. A dovish slant to the FOMC statement will tend to drastically impact rate hike probabilities and cause unnecessary volatility in the financial markets, something the Fed has been very carefully avoiding in the past.
On Thursday, the BoE will deliver their monetary policy decision along with the latest inflation report and a press conference. Analyst expectations have been set for rates to remain unchanged at the meeting, however, remarks will be closely watched in determining if there is another rate cut on the horizon. The latest third quarter GDP data was reported higher than expected. The central bank meeting’s importance is directly related to the Fed’s actions ahead of theirs. A hawkish Fed statement would tend to exacerbate moves in the Sterling in the event the BoE signals for further easing.
read more
GBP/USD Weekly Forecast October 31-November 4
The Sterling posted a small loss against the Greenback in the past week to mark the second week of low volatility. The upcoming week contains several risk events that will move the currency pair. The Bank of England and the Federal Reserve will both deliver their latest policy decision. With diverging monetary policy amongst the two central banks, there is potential for a continuation lower in the week ahead, with technical indicators also pointing to a bearish scenario.
The Federal Reserve will release their cash rate and latest monetary policy statement on Wednesday. This will be their last policy statement ahead of the December meeting for which expectations have been building for a rate increase.
Probabilities of a December rate hike moved up to 73.9% at the end of the week, up from 69.5% at the end of the prior week. There will be some expectation for the Fed to provide a stronger signal for an upcoming rate hike, even if there is an element of data dependence attached to the rhetoric. A dovish slant to the FOMC statement will tend to drastically impact rate hike probabilities and cause unnecessary volatility in the financial markets, something the Fed has been very carefully avoiding in the past.
On Thursday, the BoE will deliver their monetary policy decision along with the latest inflation report and a press conference. Analyst expectations have been set for rates to remain unchanged at the meeting, however, remarks will be closely watched in determining if there is another rate cut on the horizon. The latest third quarter GDP data was reported higher than expected. The central bank meeting’s importance is directly related to the Fed’s actions ahead of theirs. A hawkish Fed statement would tend to exacerbate moves in the Sterling in the event the BoE signals for further easing.
read more
UK data: "Business confidence hits post-referendum highs"
The Lloyds Business Barometer for October
Mark Carney to stay at Bank of England until June 2019
Bloomberg reports that Bank of England Governor Mark Carney plays to stay for nearly three more years.
He announced his decision in a letter to Chancellor of the Exchequer Philip Hammond. In it, he said he will assist with the "orderly transition to the UK's new relationship with Europe.
Hammond welcomed the decision and called Carney "highly effective".
On the weekend, a widely-cited report said Carney would leave in 2018 then a competing article said he was planning to stay longer. The answer, it seems, was somewhere in the middle.
Cable has been climbing for the past two hours. That looks like it was mostly demand ahead of month-end but the Carney news may have leaked into the market earlier. The headlines about the decision added a small extra lift to 1.2235.