GBPUSD news - page 23
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GBP/USD gains on soft U.S. home sales report
The pound firmed against the dollar on Monday after U.S. pending home sales came in short of forecasts and clouded expectations as to when the Federal Reserve may hike interest rates next year.
In U.S. trading on Monday, GBP/USD was up 0.31% at 1.6134, up from a session low of 1.6082 and off a high of 1.6147.
Cable was likely to find support at 1.5993, Thursday's low, and resistance at 1.6186, last Tuesday's high.
Pending home sales in the U.S. rose less than expected in September, dampening optimism over the health of the housing sector, industry data revealed on Monday.
The National Association of Realtors reported earlier its pending home sales index rose by 0.3% last month, disappointing expectations for a 0.5% gain. Pending home sales in August fell by 1%.
Year-on-year, pending home sales rose 1.0% in September, missing expectations for a 2.2% reading following a 4.1% decline in August.
Moderating price growth and sustained inventory levels are keeping conditions favorable for buyers.
“Housing supply for existing homes was up in September 6% from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,” said Lawrence Yun, the association's chief economist.
The numbers weakened the dollar by clouding expectations as to when the Federal Reserve may hike benchmark interest rates.
While the U.S. central bank is seen closing its monthly bond-buying stimulus program likely this week, spotty U.S. data have made it unclear when rate hikes might begin in 2015.
On Friday, the Census Bureau reported that U.S. new home sales rose 0.2% in September to 467,000 units, missing expectations for an increase to 470,000 units.
The August figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units.
Still, the dollar didn't plunge, as a longer-range view of economic indicators still points to a sustained U.S. recovery, including in the housing sector.
Earlier last week, the National Association of Realtors reported that U.S. existing home sales increased 2.4% to a 5.17 million units last month from 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.10 million units in September.
The pound, meanwhile, continued to enjoy support from U.K. growth data.
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U.K. M4 Money Supply -0.7% vs. 0.5% forecast
The amount of domestic currency in circulation and deposited in banks in the U.K. fell unexpectedly in the last quarter, official data showed on Wednesday.
In a report, Bank of England said that U.K. M4 Money Supply fell to a seasonally adjusted -0.7%, from 0.3% in the preceding quarter.
Analysts had expected U.K. M4 Money Supply to rise to 0.5% in the last quarter.
GBP/USD Exchange Rate Could See a Fall Down to 1.55 Warn Analysts
The late October relief-rally seen in the pound dollar exchange rate (GBP/USD) has come to a screeching halt following the release of the minutes from the October meeting of the US Federal Reserve.
The US dollar powered higher after it was shown the US Fed was confident that the US economy's rate of growth was on track, laying out the all-clear for the Fed to raise interest rates in 2015.
What the US Fed Did to the Sterling Dollar Pair
The US dollar has surged higher against the pound sterling after it was shown that the US central bank is on course to raise rates in mid 2015.
This contrasts to expectations concerning the Bank of England whose decision makers have been stressing the need to keep interest rates as low as possible for as long as possible - this has driven a wedge between the pound and dollar.
What can we take away from today's Fed statement? In summary the Federal Reserve 1) Ends Quantitative Easing 2) Upgrades labour market forecasts 3) Only one member, Kocherlakota, dissents 4) Does not lower its inflation assessment which markets had been expecting.
"Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing," says the part of the statement that really boosted USD sentiment.
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UK Consumer Confidence Eases In October - GfK
Consumer confidence in the United Kingdom fell slightly in October, research firm GfK revealed on Friday with an index score of -2.
That's down from -1 in September, and represents a three-month low. A negative score means that pessimists outnumber optimists.
The index was dragged lower by weakness among the sub-indexes for 12-month economic outlook and major purchases.
U.K. Banks Jump as BOE Sets Leverage Ratio at 4.05%
Barclays Plc (BARC) led banks higher in London trading after the Bank of England set a minimum regulatory ratio at a lower-than-expected level and gave firms until 2019 to comply.
Britain’s biggest banks will be hit with a basic leverage ratio of 4.05 percent, which could rise to as much as 4.95 percent if the central bank tries to cool excess credit or balance-sheet growth, the BOE said today. Analysts at Credit Suisse Group AG (CSGN) had estimated the ratio could have been set at as as much as 7.5 percent.
“It is absolutely at the lower end of people’s expectations,” said Chirantan Barua, a banking analyst at Sanford C. Bernstein Ltd. in London. “This is probably the most bank friendly regulation we have seen. That’s both in terms of the levels of capital set and in terms of time the banks have been given to beef up capital.”
Barclays climbed as much as 7.8 percent, the most since May, and was up 15.10 pence at 237.65 pence as of 2:49 p.m. in London trading. Lloyds Banking Group Plc (LLOY) climbed as much as 2.7 percent and was up 1.87 pence at 77.04 pence.
Regulators are trying to strengthen the financial system from shocks by raising the minimum of core capital banks must hold without weighting loans for riskiness. Britain is following the U.S. in making banks maintain a leverage ratio that exceeds the minimum 3 percent set by the Basel Committee on Banking Supervision. Eight banks in the U.S. will be forced to hold capital equivalent to 5 percent of assets from 2018.
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GBP/USD forecast for the week of November 3, 2014
The GBP/USD pair initially tried to rally during the course of the week, but then turned back around to slam into the 1.60 handle. With that being said though, it looks as if we have plenty of support in this area, so we believe that the market will continue to bounce around in this general vicinity. If we get a break above the 1.62 level, we feel that this market should continue to go much higher, perhaps heading as high as 1.72 given enough time. We have no interest in selling until we get below the 1.5850 handle.
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GBP/USD Forecast November 3-7
The British pound softened last week, as GBP/USD lost about 100 points. The pair closed at 1.5984, the first time weekly close below 1.60 since September. The upcoming week is a busy one, led by PMIs and Manufacturing Production. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD.
In the US, the Fed ended its QE program, an expected but still symbolic move. The Fed is generally pleased with the US economy, and and a hawkish policy statement helped bolster the greenback. GDP looked sharp, posting strong gains in Q3. British releases were uneventful and met expectations last week.
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U.K. manufacturing PMI rises to 3-month high in October
U.K. manufacturing PMI rises to 3-month high in October
Pound rises to $1.6016 after U.K. PMI; was at $1.5999 before
Pound Strengthens a Fourth Day Versus Euro as U.K. Output Climbs
The pound strengthened for a fourth day against the euro as data showed manufacturing growth in the U.K. unexpectedly accelerated last month, while it was close to stagnating in the 18-nation currency bloc.
Sterling advanced versus most of its 16 major counterparts. Separate purchasing managers’ indexes this week will show U.K. construction and services output also grew last month, according to surveys of analysts by Bloomberg. Bank of England policy makers will meet Nov. 5-6 to decide on interest rates. In the past three months, two officials have voted for higher borrowing costs. U.K. government bonds fell before the Debt Management Office sells 800 million pounds ($1.3 billion) of index-linked 2050 gilts tomorrow.
“Broadly the U.K. story remains reasonably constructive,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “If we are going to see evidence of continued reasonable growth expectations and the two PMIs to come will be hugely significant, if those represent anything like the topside risk we have seen in manufacturing, then sterling should continue relatively well.”
The pound gained 0.3 percent to 78.09 per euro at 11:35 a.m. in London. It strengthened 0.8 percent in the previous three days. Sterling was little changed at $1.6002.
The U.K. currency could appreciate to 77.50 pence per euro this week, CIBC’s Stretch said.
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Pound to Euro Forecast to Hit 1.3 as UK and Eurozone Economies Go Their Separate Ways
A divergence in economic performance has prompted a number of currency forecasters to predict the GBP/EUR rate will ultimately hit the 1.3.
The UK and the EU appear to be on separate paths despite the close trading relationship between both economies.
From Europe we have seen more of the same in terms of economic data, which could only be described as ‘lacklustre’ at best.
The same cannot be said for the UK; on the 3rd of November the British pound exchange rate complex rose higher on news that the UK's manufacturing sector is outperforming expectations.
The Markit Manufacturing PMI index stood at 53.2, recovering from September’s 17-month low of 51.5 and beating the consensus forecast for 51.2.
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Be aware: The above quotes are taken from the global currency spot market. It must be noted that your bank will widen the spread on the above numbers when passing on their retail rate to customers. An independent currency provider will however guarantee to undercut the bank's offer thus delivering you more forex. Please see more on this here.
HiFX: Forecasting GBP/EUR at 1.3
"The UK manufacturing sector made a bright start to the final quarter of 2014, with rates of expansion in production and new business accelerating sharply from their September lows," says a joint note from Markit and the CIPS in reference to the consensus-beating data.
Strong data will be key to driving sterling valuations.
The 1.300 figure for sterling euro has been mentioned on a number of occassions and Chris Towner at HiFX adds to this bullish viewpoint on the GBP to EUR:
“Not only is the EU economy stagnating, but they have an unemployment rate close to historic highs at 11.5% and serious concerns about falling into deflation with inflation rising by a mere 0.4% y/y.On the other side of the Channel, the UK economy has seen a million jobs created in the last eighteen months with the unemployment rate dipping to a 6-year low of 6% having been up at 7.7% a year earlier.
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