GBPUSD news - page 24
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UK Construction PMI falls to 61 – GBP/USD ticks lower
A small disappointment in the UK construction sector: growth is somewhat slower than expected with 61 points, lower than 63.5 points expected. Nevertheless, this represents strong growth.
GBP/USD is now under 1.60, after battling this line.
The UK construction PMI was expected to slide to 63.5 points after a super strong 64.2 points in September.
GBP/USD traded very close to 1.60 just before the publication.
Yesterday, manufacturing PMI beat expectations. This is the weakest link in the UK economy.
Pound to Euro Recovery Undermined by Bank of England QIR Fears and Draghi Mutiny
The turbulence experienced by the British pound (GBP) since the last BoE meeting has been notable, but sterling has regained its composure to outperform every currency in G10 with the exception of USD.
The recovery in the pound to euro exchange rate (GBP/EUR) comes despite a run of sub-consensus UK data and dovish central bank rhetoric.
However, threats to the GBP/EUR rally lie ahead with the Bank of England featuring twice in November - the policy meeting on Thursday and the all-important November Quarterly Inflation report (QIR).
It is the monthly meeting that could hurt the GBP against the EUR warn analysts at Bank of America Merrill Lynch.
The Euro Rallies on Draghi Leadership Woes
The assumption that the euro will weaken as the European Central Bank (ECB) embarks on an irreversible road of policy easing was today questioned.
Eurozone central bankers, who set policy at the ECB, plan to challenge European Central Bank chief Mario Draghi on Wednesday over what they see as his secretive management style and erratic communication and will urge him to act more collegially, ECB sources told Reuters.
The report says Draghi effectively set a target for increasing the ECB's balance sheet immediately after the policy-making governing council explicitly agreed not to make any figure public.
Irritation among national governors who hold a majority on the 24-member council could limit Draghi's space for bolder policy action in the coming months.
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GBP/USD: The Next 48 Crucial Hours
The US elections are now behind us, and as widely anticipated, Republicans have solidified their lead in the House of Representatives and seized control of the Senate. For the next two years, the legislative branch of the government will be controlled by the Republican majority, whereas the executive branch (President) is Democratic. While the Republicans’ strong performance may lead to some progress on trade and energy policies among others, the gridlock that has ensnared Washington over the last few years appears likely to extend for the final two years of Obama’s lame duck presidency.
For more on the longer-term implications of the election for the US Dollar and stocks, including an analysis of what it may mean for the debt ceiling, see our special report “What Do the US Midterm Elections Mean for the Dollar and Stocks?”
The initial forex reaction to the election has been modest US dollar strength, which took GBP/USD down to test its 14-month low at 1.5855. Taking a broader look at the pair, it remains below the bearish trend line that has guided rates lower since the mid-July high near 1.7200. As long as that bearish barrier remains intact, lower prices will be favored in cable.
The RSI indicator supports the is view: even though rates have generally moved sideways around 1.60 for the past month, the indicator has been unable to rise above even the neutral 50 level, suggesting that sellers are firmly in control. As we go to press, the indicator is near 40, suggesting the potential for plenty of downside before reaching oversold territory (< 20).
Heading into a busy latter half of the week, GBP/USD traders will be watching Thursday’s UK Manufacturing Production report (9:30 GMT) and the BOE meeting (12:00 GMT). Friday’s trade will bring the always-critical US Non-Farm Payroll report (13:30 GMT) as well as a speech by Fed Chairwoman Yellen (15:15 GMT).
If these reports show a continued divergence between the economic performance of the US and UK, GBP/USD may break to a new 14-month low under 1.5855, potentially exposing the long-term 61.8% Fibonacci retracement at 1.5720 later this month. On the other hand, a stumble by the US economy and stronger data from the UK could cause GBP/USD to break its bearish trend line and finally form a more durable bounce.
Either way, the next 48 hours may set the tone for GBP/USD’s upcoming month.
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U.K. Halifax HPI -0.4% vs. 0.4% forecast
The UK.’s Halifax house price index fell unexpectedly last month, industry data showed on Thursday.
In a report, HBOS said that U.K. Halifax HPI fell to a seasonally adjusted -0.4%, from 0.6% in the preceding month.
Analysts had expected U.K. Halifax HPI to rise 0.4% last month.
Sterling hits session lows after BoE holds
The pound fell to session lows against the dollar on Thursday after the Bank of England left monetary policy on hold, in a widely anticipated decision.
GBP/USD was down 0.18% to 1.5943 from around 1.5961 ahead of the announcement.
The drop in the pound came after the Bank of England’s monetary policy committee voted to leave U.K. interest rates at their current record lows of 0.5%.
The MPC also made no changes to its asset purchase scheme.
The decision came a day after data showed that the U.K. service sector expanded at the slowest rate in 17 months in October, adding to indications that the rate of the economic recovery is cooling.
The report prompted investors to push back expectations for a rate hike by the BoE and briefly send the pound to one year lows against the dollar.
The pound was also weaker against the euro, with EUR/GBP rising 0.49% to 0.7852, from 0.7844 earlier.
Investors were awaiting the outcome of the European Central Bank’s meeting later Thursday after the Bank of Japan’s surprise stimulus move late last week fuelled expectations that it will soon follow suit.
Most analysts were expecting the ECB to keep interest rates on hold at record lows and to refrain from implementing any new easing measures.
However markets were seeking assurances that the central bank remains prepared to implement additional stimulus measures if necessary, in order to spur growth and inflation in the euro area.
The bank’s latest policy announcement was given extra significance following recent reports of tensions within the ECB over President Mario Draghi’s leadership.
Data on Thursday showed that German factory orders rose just 0.8% in September, well below forecasts of a 2.3% increase.
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GBP/USD gains on soft U.S. October jobs report
The pound strengthened against the dollar on Friday after data revealed that the U.S. economy created fewer nonfarm payrolls in October than markets were anticipating.
In U.S. trading on Friday, GBP/USD was up 0.08% at 1.5844, up from a session low of 1.5791 and off a high of 1.5860.
Cable was likely to find support at 1.5774, the low from Sept. 13, 2013, and resistance at 1.6023, Wednesday's high.
The Department of Labor reported earlier that the U.S. economy added 214,000 jobs in October, missing expectations for an increase of 231,000. The number of jobs added in September was revised to 256,000 from a previously estimated 248,000.
The report also revealed that the U.S. unemployment rate ticked down to 5.8% in October from 5.9% in September. Analysts had expected the unemployment rate to remain unchanged last month.
While not overwhelmingly disappointing, the less-than-stellar report gave investors room to sell the greenback for profits and take time to rethink when the Federal Reserve will hike interest rates next year.
The dollar has firmed in recent weeks as investors prepare for U.S. monetary policy to grow less accommodative while Europe and Japan move in the opposite direction.
The Fed recently closed its monthly bond-buying program and is expected to raise interest rates some time in 2015, though the timing as to when next year benchmark borrowing costs may rise remains up in the air thanks to hit-or-miss U.S. data.
Meanwhile in the U.K., the Office for National Statistics reported earlier that its trade deficit widened to £9.82 billion in September from £8.95 billion in August, whose figure was revised from a previously estimated deficit of £9.10 billion.
Analysts had expected the trade deficit to widen to £9.40 billion in September.
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.38% at 0.7845, and down against the yen, with GBP/JPY down 0.01% at 142.56.
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GBP/USD forecast for the week of November 10, 2014
The GBP/USD pair initially fell during the course of the week, but did find a bit of a supportive area in the 1.58 handle. That being the case, we could get a little bit of a bounce here as we could continue to go back and forth around the 1.60 handle overall. If we break down below the 1.58 level though we feel that this market will more than likely head to the 1.55 handle given enough time. We have no interest whatsoever in buying this market until we get above the 1.62 handle, something that doesn’t look very likely at the moment.
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GBP/USD weekly outlook: November 10 - 14
The pound pulled back from 14-month lows against the dollar on Friday after data showed that the U.S. economy added fewer jobs than forecast last month, prompting investors to book profits in the greenback.
1.5872 in late trade, after falling to lows of 1.5791 earlier, the weakest since September 2013. For the week, the pair was still down 0.62%.
The Labor Department reported that the U.S. economy added 214,000 jobs in October, missing expectations for jobs growth of 231,000.
September’s figure was revised up to 256,000 from a previously reported 248,000 and August’s figure was also revised up to 203,000 from 180,000, pointing to underlying strength in the labor market.
The U.S. unemployment rate ticked down to a fresh six-year low of 5.8% from 5.9% in September.
The data prompted investors to sell the dollar to lock in gains following its recent rally but did little to alter expectations that the Federal Reserve will raise interest rates ahead of its other major peers.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.63% to 87.66, off the four-and-a-half year peaks of 88.31 hit earlier in the session.
A day earlier the Bank of England’s monetary policy committee voted to leave U.K. interest rates at their current record lows of 0.5%, in a widely anticipated decision.
The pound remained under pressure after surveys of the U.K. service and manufacturing sectors released earlier in week added to worries that the rate of the economic recovery is slowing.
Elsewhere, sterling was lower against the euro on Friday, with EUR/GBP advancing 0.44% to 0.7848, recovering from Thursday’s five week lows of 0.7798.
The single currency weakened after the European Central Bank reiterated its pledge on Thursday to implement further stimulus measures if needed to combat persistently low levels of inflation in the euro area.
In the week ahead, Thursday’s inflation report from the BoE will closely watched amid fears that the recovery is moderating, while investors will also be looking ahead to Friday’s reports on U.S. retail sales and consumer confidence.
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Pound to Dollar Exchange Rate Falls as Billions of $ Worth of Funds Flow Into USA
The US dollar exchange rate complex continues to appreciate on global forex markets with a host of currencies, including the pound sterling, continuing to lose ground.
Latest data from one of the financial institutions we follow confirms billions of dollars are flowing into the United States on a weekly basis as global investors continue to buy into the US growth story.
As a result the pound sterling continues to suffer - the pound to dollar exchange rate (GBP/USD) is seen at 1.5832 ahead of the new week, this down from the high seen at 1.7181 set in mid-year.
The GBP to USD closed unchanged on a day-to-day basis on Friday following the release of a slightly disappointing non-farm payrolls report.
The euro to dollar exchange rate (EUR/USD) meanwhile remains under pressure with the pair starting the new week at 1.2389.
The under-par NFP report which read at 214,000 in October won’t cause Fed President Janet Yellen and her Fed colleagues too much of a headache just yet and the strong USD run higher is likely to continue.
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GBP/USD edges up in subdued trade
The pound edged up against the U.S. dollar in subdued trade on Monday, as investors continued to lock in profits on the greenback's recent rally following the release of mostly positive U.S. employment data on Friday.
GBP/USD hit 1.5918 during European afternoon trade, the pair's highest since November 6; the pair subsequently consolidated at 1.5894, adding 0.14%.
Cable was likely to find support at 1.5788, Friday's low and a 14-month low and resistance at 1.6003, the high from November 6.
On Friday, the Labor Department reported that the U.S. economy added 214,000 jobs in October, missing expectations for jobs growth of 231,000.
September’s figure was revised up to 256,000 from a previously reported 248,000 and August’s figure was also revised up to 203,000 from 180,000 pointing to underlying strength in the labor market.
The U.S. unemployment rate ticked down to a fresh six-year low of 5.8% from 5.9% in September.
The data prompted investors to sell the greenback to lock in gains following its recent rally, but did little to alter expectations that the Federal Reserve will raise interest rates ahead of its other major peers.
The pound had dropped to 14-month lows against the dollar late last week, as recent surveys of the U.K. service and manufacturing sectors added to worries that the rate of the economic recovery is slowing.
Sterling was lower against the euro, with EUR/GBP edging up 0.11% to 0.7857.
In the euro zone, data showed that Italian industrial production fell 0.9% from a month earlier in September, compared to expectations for a 0.2% gain.
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