GBPUSD news - page 110
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UK Office for Budget Responsibility puts cost of Brexit at 58 billion pounds
UK Chancellor of the Exchequer Philip Hammond delivered the 'Autumn Statement' overnight
- Lower migration,
- Lower productivity growth,
- Higher inflation
- Ongoing low interest rates
The Secretary to the UK Treasurer, Simon Kirby, described the figure as "eye-wateringly large."October 2016 UK BBA mortgage approvals 40,851 vs 38,975 exp
October 2016 UK BBA mortgage approvals 24 November 2016
Mortgage approvals remain steady, though borrowing amounts have fallen after last months jump.
Too Early to Bin the Pound to Dollar Exchange Rate's November Rally
Pound Sterling was forced into retreat by a renewed push by Dollar-bulls over recent hours - but don't doubt the GBP/USD potential to climb higher just yet.
The GBP/USD can still move higher we believe.
We wrote recently that we had adjusted our stance from being bearish to slightly bullish following the Pound’s rally at the start of this week.
We believe the call remains valid.
The Head and Shoulders reversal, topping pattern on the four-hour chart, which augured more downside failed after the strong move higher on Monday.
The exchange rate now looks like it is consolidating and forming what appears to be a bullish flag.
The expectation is for a continuation higher the same distance as the initial bounce.
No Revisions to UK Q3 GDP, Growth Confirmed at 0.5%
The unrevised third-quarter UK GDP confirmed the preliminary reading of 0.5% for the three-month period and was also in line with market expectations.
Annual growth was also unrevised at 2.3% and in line with expectations with the economy registering growth for 13 quarters in succession.
There was significant growth in the services sector for the quarter of 0.8%, but all other sectors contracted with a 0.5% decline in production. Although there was an upward revision to construction, there was still a 1.1% quarterly decline.
Net trade contributed 0.5% growth for the quarter, while household spending rose 0.7%.
Business investment was estimated to have increased 0.9% on the quarter, which was slightly stronger than the expected increase of 0.6%, although there was an annual decline of 1.6%.
Investment will be a crucial focus over the next few months as the near-term increase in Bank of England growth projections was based partly on the fact that investment had been slightly less weak than expected. There will still be important concerns that Brexit uncertainty will damage capital spending and any downturn for the fourth quarter would increase concerns once again.
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GBP/USD forecast for the week of November 28, 2016
The British pound had a slightly positive week, but essentially sat still. The 1.25 level above is resistive, and ultimately I think the sellers will return. However, this is a market that seems a bit dead at the moment, so I don’t really have any interest in trading information were or long-term perspective for that matter. I believe in the longer-term downtrend, so I’m waiting to see an opportunity to search shorting. I don’t have a right now but will keep you up to date as to what I think.
GBP: Oversold S/T But Vulnerable To Further 'Flash Crashes'
The key question for sterling’s evolution from here is whether or not the Brexit uncertainty discount is sufficient.
While the ultimate resolution of Brexit may have an impact on GBP’s equilibrium value, at current levels, GBP represents clear long-term value, having been cheaper on a real effective basis only twice in the last half century: briefly at the depths of the Global Financial Crisis, and during its mid-70s balance of payments crisis (Figure 14).
In our view, this is more than sufficient discount, but that does not mean that GBP cannot get cheaper still.
While the medium-term value of GBP is extremely compelling, there is a strong incentive for buyers of long-term UK investments to wait for the Government to announce its Brexit negotiation plans. This leaves GBP exposed to further “flash crashes”, particularly in periods of illiquidity as important constitutional questions regarding the Government’s path to trigger Article 50 remain in question.
That said, positioning in GBP appears quite short and momentum indicators are indicative of oversold GBP positions (Figure 15),limiting the ability of GBP to extend significantly lower, even over short horizons.
source
Cable falls down the stairs
Just a quick 50+ pips from 1.2490
GBP/USD Extends Recovery, Attempting a Break Above Resistance at 1.2500
Sterling continues to rally versus the dollar in today’s trading, as GBP/USD is now up against resistance at the 1.2500 area. This level has been tested on numerous occasions since mid-November. The pair is currently trading at 1.2517, 0.81% over Monday’s North American close.
A sustained move above 1.2500 is required to improve the near term outlook for the pair and suggest a follow through advance to the November 11th high at 1.2674 is possible. Among the major currencies, sterling is currently holding up best versus the dollar.
Sterling benefited this morning following the release of strong consumer lending data from the Bank of England. At the same time, the dollar is off the highs of the session, having come under pressure following the release of the second estimate of third quarter US GDP, which showed growth was revised up to an annual rate of 3.2%, versus consensus estimates of 3.0%, from 2.9% in the advance estimate. The dollar peaked at 101.64 as the data was released and has since been under pressure, currently trading at 101.07, down marginally on the day.
The dollar also failed to benefit from the release of US Consumer Confidence. The Conference Board reading of consumer confidence increased sharply to 107.1 from an upwardly revised 100.8 for October, which was originally reported as 98.6. This was the highest reading since the middle of 2007.
It could be that the dollar is reacting to what remains a heavily overbought condition and may extend a period of consolidation over the near term in an effort to work off the overextended condition. The dollar remaining under pressure will benefit GBP/USD.
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UK data: GfK Consumer sentiment: -8 (expected -4, prior -3)
GfK consumer sentiment for November
A quick drop in the pound, month end flows are cited
GBPUSD drops to 1.2425 in a flash as EURGBP gets hoovered up