GBPUSD news - page 71
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GBP/USD: Sterling Ticks Higher Ahead of BoE's 'Super Thursday' Sterling remained little changed on Thursday ahead of the Bank of England (BoE) Inflation Report and rate decision later in the day.
The chances are that there might be increased support for an interest rate hike within the nine-strong Monetary Policy Committee (MPC) on Thursday, when the Bank of England (BoE) announces the trinity of its major monetary instrumentarium - the policy decision, the MPC minutes, and the quarterly Inflation Report forecasts - the last 'Super Thursday' for 2015.
The cable currency pair was seen 0.10% higher after the market open on Thursday, trading at $1.5398.
Ian McCafferty, the solo supporter of a rate hike so far this year, might find support from Kristin Forbes and/or Martin Weale - the two external rate-setters who have recently been more upbeat on the outlook for inflation and growth.
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Pound plummets through 1.5300 as BOE worry about inflation & growth and see an even flatter path for rates A couple of key comments make this a very dovish report This addition;
"The MPC's objective is to return inflation to target sustainably; that is, without an overshoot once persistent disinflationary forces ultimately wane"
This;
"The path for Bank Rate implied by market yields, on which the MPC's projections are conditioned, has fallen and now embodies an even more gradual pace of tightening than at the time of the previous Report"
They've gone heavy on the warnings and the first comment is both a mixed message. It gives them scope to keep rates low while inflation is low yet gives a hawkish message that they will be watching for any signs of inflation heating up quickly
Wage growth forecasts have been brought lower for the year and the BOE is not buying into the stronger data seen this month
GBPUSD has been down to 1.5276 and is likely to remain soft going into the inflation report presser. It's going to be hard to see how Carney can counter the headlines with any talk so look for further weakness if he elaborates on these headlines
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Why The BoE Stayed Dovish It was a subdued night of trade in the currency market as traders awaited the BOE rate decision and presser due at 12:00 GMT, while the USD/JPY continued to creep higher in reaction to yesterday's solid US data which increased expectations of a Fed hike in December.
The eco calendar was barren today with exception of EU retail sales which missed their mark at -0.1% versus 0.2% eyed, confirming the ECB view that final demand in the EZ remains tepid at best as growth proceeds at a moderate pace.
The focus in early North American trade today will be the BOE and Governor Carney's presser as the MPC officials try to set the proper expectations for an exit from QE. Overall the UK economy has been one of the better performing members of the G-7 universe and on fundamental factors alone a strong argument can be made that the BOE could begin the normalization process now. Job growth, wage growth and final demand have all improved over the past few months while PMI remains comfortably above the 50 boom/bust line.
However, the BOE has been reluctant to even hint at a timeline for normalization due to several concerns. With the ECB pursuing an aggressive easing policy, the EUR/GBP now finds itself near recent lows and UK monetary officials are concerned that any tightening could push the pair towards the .6500 level, making the country's exports highly uncompetitive. Those fears have been allayed somewhat by the better than expected PMI Manufacturing figures which showed healthy growth despite a strengthening currency regime.
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GBP/USD: Sterling Falls to Fresh 1-Month Lows After UK Data Sterling extended the Bank of England (BoE) driven losses on Friday after the latest report on UK industrial and manufacturing production in September. Investors now look ahead to the US session and the release of non-farm payrolls.
On a monthly basis manufacturing production rose 0.8% while anually it fell 0.6% in September, compared to a 0.4% rise and a 0.9% decline, respectively, seen in the previous month.
Industrial production fell 0.2% in September month-on-month, while year-on-year it rose 1.1%.
Cable initially suffered from a dovish BoE Inflation Report in the previous session. After the release the GBP/USD was seen 0.45% lower at $1.5140, the lowest level since October 2.
For most of this year speculation has surrounded the timing of when the US Federal Reserve (Fed) and the BoE would raise interest rates. The Fed in particular has been more precise about the possible timing of such a move, while the BoE has been more vague, but with a potential timeline of early next year.
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GBP/USD forecast for the week of November 9, 2015 he GBP/USD pair initially tried to rally during the course of the week, but found the 1.55 level to be far too resistive. With that being the case, the market broke down below the 1.52 handle. Because of this, and the fact that we are closing towards the bottom of the candle suggests that perhaps we will continue to go lower. The 1.50 level is just below, so that could cause a little bit of a bounce, but at this point in time we think that would only end up being a selling opportunity as the us dollar is favored.
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GBP/USD: Cable Drops Like Stone Over Week, Finishes Below $1.51 The past five days have been very difficult for the pound and it was sold-off dramatically, with cable losing 2.47% over the week , almost four big figures, to close at $1.5050 on Friday.
On Monday, the manufacturing PMI for October in the UK notably improved from 51.5 to 55.5 and the pair rose toward $1.55, but failed to hold gains and declined to daily lows around $1.5420 later in the day.
The UK construction PMI for October slightly decreased to 58.8 from 59.9 previously, Markit advised on Tuesday, but the pound failed to react in a volatile way.
Furthermore on Wednesday, the UK services PMI for October accelerated to 54.9 from 53.3 in September.
From the US dollar point of view on the same day, the US trade deficit narrowed to $40.8 billion, from $48.0 billion previously, which should be positive for Q3 GDP revisions in the near future.
The US ADP employment report for October showed a 182,000 jobs gain, down from a revised 190,000 in September. Moreover, ISM's non-manufacturing PMI for October came out above market estimates, when it printed 59.1, while analysts had expected the figure to decline from 56.9 to 56.5.
On Thursday, the Bank of England (BoE) left the main rate at 0.5% and the volume of asset buying at £375 billion annually.
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GBP/USD Forecast Nov. 9-13 GBP/USD had a disastrous week, as the pair dropped 400 points. GBP/USD closed at 1.5042. This week’s key events are Average Earnings Index and Claimant Count Change. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD.
Updates:
The US dollar pummeled the pound last week, following the Non-Farm Payrolls report, which more than beat expectations, with 271K jobs gained and a 2.5% y/y gain in wages. This outstanding release points to a strong labor market, and certainly keeps the December rate hike option wide open. In the UK, the BOE lowered forecasts and extended the inflation target for 3 years, and the pound reacted with sharp losses. Solid PMIs and an excellent Manufacturing Production report was not enough to stop the dollar juggernaut.
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Sterling Trades in Narrow Range Above $1.51, Waiting for Incentives Although British pound emerged above the $1.51 in the overnight session, the cable edged lower during the early European session on Tuesday.
In the post-US non-farm payrolls consolidative trading, the UK's pound snapped its three-day losing streak that had driven the cable to a seven-month bottom at $1.5023 on November 6. On Tuesday, sterling was seen 0.07% lower at $1.5103.
The current vacuum on the macro front, both in US and Europe, leaves the cable currency pair at the mercy of the market sentiment, primarily focused on the December rate hike speculation.
Another set of downbeat Chinese data released earlier on Tuesday combined with the prospects of US dollar strengthening, weighed on equity markets on both Atlantic shores and Asia, putting a lid on some of the gains of recent weeks.
Yesterday's profit taking was also given a helping hand by comments from Chicago Fed President Charles Evans, an avowed dove on the FOMC.
Throughout most of this year, Evans has maintained that the Fed should err on the side of caution when it comes to raising rates, citing early 2016 at the earliest for potential action. Yesterday he softened this tone somewhat by saying that he wouldn’t dissent to a rise in rates in December in the event of a majority consensus, which suggests that the barriers for inaction next month appear to be peeling away by the day.
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GBP/USD: Sterling Bounce Quelled Ahead of UK Jobs Data
The UK currency ran into some resistance whilst attempting to extend its rebound from last week's seven-month lows against its US rival, as investors tread lightly ahead of a crucial labor market report.
The pound changed hands around the $1.51 marker on Tuesday, virtually flat compared to the previous session. A rally in the currency earlier in the day peaked at $1.5145 at which point sterling gained 0.2% on the dollar, or less than 40 pips, but the gains fizzled out quickly.
Investors might be reluctant to make bets ahead of fresh jobs data from the Office of National Statistics on Wednesday.
The jobless rate should remain unchanged at 5.4% in September. Although the UK jobs market tightened further in recent months, wage growth is expected to moderate when the fresh data cross the wires. It might take a while before slack returns to levels consistent with full employment which the Bank of England (BoE) estimates to be consistent with a jobless rate of 5%.
Without further tightening in the labor market, faster in wage growth will remain elusive, leaving inflation at the mercy of foreign catalysts such as cheap energy and other raw materials costs as well as non-energy products.
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