GBPUSD news - page 25
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Afex Forecasting Pound Euro to Hit a 1.40 Exchange Rate Longer Term
Those with an interest in the pound sterling to euro conversion rate will continue to look out for the BoE inflation report (QIR) and the UK labour market data, both scheduled on Wednesday.
We could see the rate come under pressure if the Bank of England strikes a negative tone on the UK outlook, whilst broad technicals remain positive Sterling values are struggling towards the prior 1.2875 cycle peaks from a daily perspective at least.
However, forecasts from one analyst we follow currently points to the potential for further gains for the pound euro rate ultimately being achieved.
A day ahead of the QIR the British pound to euro exchange rate (GBP/EUR) is seen 0.09 pct higher on a day-to-day comparison with the conversion currently quoted at 1.2768.
Please note that the above quotes will attract the charge of of a discretionary spread by your bank. If you are looking to make international payments we suggest being quoted by an independent provider. By tapping the wholesale markets they can offer up to 5% more currency in some instances.
Furthermore, you should avoid negative currency moves by ensuring the correct risk controls are in place, learn more.
Forecasting Further Gains for GBP/EUR... Eventually
While the rally higher in the sterling euro rate has struggled lately analyst Lucy Lillicrap at brokerage Afex says ultimately further gains are likely to be eked out:
"Looking further ahead an eventual extension to 1.3000 is still implied with dips beforehand thus viewed as broadly corrective.
"However localised resistance now exists at 1.2820/30 and any breach of nearby 1.2700 support could postpone this awaited positive trend resumption for several more weeks (in favour of a re-test of 1.2600 or even the psychological 1.2500 level first).
"directly or otherwise further gains are readable and on this basis any emergent GBP weakness should continue to prove unsustainable. Although not anticipated directly once 1.3000 gives way 1.4000 will then be reachable long term."
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U.K. jobless claims fall less than forecast in October
The number of people claiming unemployment benefits in the U.K. declined less-than-expected in October, while the country’s jobless rate held steady at a six-year low, official data showed on Wednesday.
In a report, the U.K. Office for National Statistics said that the claimant count fell by a seasonally adjusted 20,400 last month, compared to expectations for a decline of 24,900 people.
September’s figure was revised to a drop of 18,400 people from a previously reported decline of 18,600.
The report also showed that the rate of unemployment held steady at 6.0% in the three months to September, compared to expectations for a reading of 5.9%.
GBP/USD was trading at 1.5920 from around 1.5906 ahead of the release of the data, while EUR/GBP was at 0.7826 from 0.7835 earlier.
Meanwhile, European stock markets remained lower. London’s FTSE 100 lost 0.4%, the DJ Euro Stoxx 50 shed 0.9%, France's CAC 40 declined 0.7%, while Germany's DAX slumped 0.95%.
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GBP/USD dips after BoE trims inflation forecasts
The pound fell against the dollar on Wednesday after the Bank of England cut its inflation forecasts, which cast doubts on the strengthen of the country's recovery.
In U.S. trading on Wednesday, GBP/USD was down 0.77% at 1.5798, up from a session low of 1.5794 and off a high of 1.5941.
Cable was likely to find support at 1.5788, last Friday's low, and resistance at 1.5945, Tuesday's high.
The pound came under pressure after the Bank of England reported earlier inflation will likely remain below its 2% target in the near term and fall below 1% at some point during the next six months. The bank said it now expects inflation to take three years to return to its 2% target.
The bank said the outlook for inflation had weakened due to steep declines in commodity prices and the sluggish outlook for global growth.
The annual rate of U.K. inflation fell to a five-year low of 1.2% in September.
"When Bank Rate does begin to rise, the pace of rate increases is expected to be gradual, with rates probably remaining below average historical levels for some time," the BoE said.
The bank said it continued to expect economic growth of 3.5% this year but pared its forecast for growth in 2015 to 2.9% from 3.1% in August.
Earlier Wednesday, the latest U.K. employment report showed that average earnings rose in the three months to September.
The Office of National Statistics reported that total earnings, including bonuses, rose 1.0%, up from a 0.7% increase in the three months to August.
Average weekly earnings, excluding bonuses, rose by 1.3% in the three months to September, after a 0.9% increase in the three months to August.
It was the first time since the onset of the 2008 financial crisis that average weekly earnings, excluding bonuses, outstripped inflation.
The number of people claiming unemployment benefits fell by 20,400 in October the ONS said, below expectations for a decline of 24,900.
The U.K. unemployment rate was unchanged at 6.0% in the three months to September, compared to forecast for a downtick to 5.9%.
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Pound falls to 14 month lows against dollar
The pound fell to 14-month lows against the dollar on Thursday, one day after the Bank of England cut forecasts for growth and inflation in its quarterly inflation report, prompting the market to push back expectations for a rate hike.
GBP/USD slid 0.12% to 1.5756, the lowest level since September 2013, from 1.5776 late Wednesday.
The drop in the pound came after the BoE said Wednesday that inflation is likely remain below its 2% target in the near term and fall below 1% at some point during the next six months. The bank now expects inflation to take three years to return to its 2% target.
The bank said the outlook for inflation had weakened due to steep declines in commodity prices and the sluggish outlook for global growth.
The annual rate of U.K. inflation fell to a five-year low of 1.2% in September.
The bank said it continued to expect economic growth of 3.5% this year but pared its forecast for growth in 2015 to 2.9% from 3.1% in August.
BoE Governor Mark Carney noted that since August markets had pushed back expectations for a rate increase to October of next year and added that investors were right to delay expectations.
Sterling slumped to two-week lows against the euro, with EUR/GBP rising 0.34% to 0.7910.
In the euro zone, data on Thursday showed that inflation in Germany remained weak last month but the rate of inflation in France ticked higher.
The annual rate of inflation in Germany was unchanged at 0.8% in October, but prices actually fell 0.3% from a month earlier.
A separate report showed that the annual rate of inflation in France, the euro area’s second largest economy, rose to 0.5% last month, up from 0.3% in September and ahead of forecasts for 0.4%.
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GBP/USD at fourteen month low
The pound dropped to a fourteen month low against the dollar on Friday. It was still reeling from Wednesday’s Bank of England inflation report. The central bank cut inflation and GDP forecasts; 2014 CPI forecasts were cut from 1.9% to 1.2%, 2015 CPI was cut from 1.7% to 1.4% and 2015 GDP was cut from 3.1% to 2.9%.
The bank also predicted that inflation will fall below 1% over the next 6 months. It wasn’t all bad news however. Data released on Wednesday morning showed that average earnings beat expectations and Governor Carney went on to say that he expected average salaries to grow by 2% by the end of 2015. It failed to save the pound though and cable went on to break down through various stop-loss levels (the main support level being 1.57) falling to a low of 1.5656.
There was also healthy demand for EUR/GBP towards the end of this week, which did in turn put further pressure on GBP/USD. EUR/USD bumped higher towards the end of the week and for a moment looked like it might push on through 1.25. It didn’t and traded to a high of 1.2491. French GDP printed better than market forecasts at 0.3% q/q vs. expectations for 0.1% q/q on Friday, which gave the single currency a boost.
There wasn’t much by way of top tier US economic data last week, but the greenback was generally better off. It finished the week stronger across the board, especially vs. the commodity currencies. Glencore, a world mining giant, announced on Friday that it will be shutting down Australian coal operations for three weeks in December in response to current oversupply of the commodity. This heaped pressure on the Aussie not long after Assistant RBA Governor Kent failed to rule out possible FX intervention as he jaw-boned the currency lower. That said, both AUD and NZD remain firm against the pound.
Focus early next week will be on a speech from ECB President Draghi. His position as ECB president has been questioned of late, but his comments will no doubt be centred on monetary policy. UK inflation data is due on Tuesday and we are due MPC minutes on Wednesday. Likewise, US FOMC minutes are due later that same day and U.S. inflation figures are released on Friday. It’s going to be a busy and perhaps defining week. Momentum can be difficult to break and if UK data continues to disappoint we might see GBP/USD move to new and lower territory.
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GBP/USD forecast for the week of November 17, 2014
The GBP/USD pair broke down during the course of the week, and now looks very bearish. Because of this, we feel that this market will then go to the 1.55 handle, and then possibly 1.50 handle given enough time. Rallies at this point in time should continue to be selling opportunities, as we believe the 1.60 level is now the” ceiling” of this particular currency pair. The US dollar is by far the most favored currency in the world, and we don’t see that changing anytime soon as the Federal Reserve has left the quantitative easing game.
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GBP/USD slips near 14-month lows
The pound slipped against the U.S. dollar on Monday, re-approaching 14-month lows after data showed a decline in U.K. house prices and as last week's remarks by the Bank of England continued to weigh.
GBP/USD hit 1.5620 durin European morning trade, the session low; the pair subsequently consolidated at 1.5632, shedding 0.25%.
Cable was likely to find support at 1.5504 and resistance at 1.5782, the high of November 13.
Industry data showed that U.K. house prices dropped 1.7% in November, after a 2.6% rise the previous month.
The report came after the Office for National Statistics reported on Friday that U.K. construction output rose 1.8% in September, below expectations for an increase of 3.7%.
The pound also remained under pressure after the Bank of England said last Wednesday that inflation is likely remain below its 2% target in the near term and fall below 1% at some point during the next six months.
The bank now expects inflation to take three years to return to its 2% target.
Meanwhile, sentiment on the dollar remained vulnerable after mixed U.S. data was released on Friday.
The preliminary reading of the University of Michigan’s consumer sentiment index rose to a seven year high of 89.4 on Friday, better than forecasts of 87.5 and up from October’s reading of 86.9.
However the report also showed that consumers expected annual inflation of 2.6% this year, down from expectations for inflation of 2.9% in October.
Sterling was steady against the euro, with EUR/GBP inching down 0.05% to 0.7990.
Later in the day, the U.S. was to release a report on manufacturing activity in the New York region, as well as data on industrial production.
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gbp/usd continue down trend?
U.K. October inflation rises 1.3% vs. 1.2% forecast
U.K. October inflation rises 1.3% vs. 1.2% forecast
BOE minutes show rate vote split at 7-2 again
Minutes from the Bank of England's most recent policy meeting released Wednesday showed that the Monetary Policy Committee voted 7-2 to keep rates on hold and its quantitative-easing program unchanged.
The minutes show seven members were in favor of leaving the key interest rate at a record low of 0.5% and making no changes to the central bank's £375 billion asset-purchase program.
However, dissenting members Martin Weale and Ian McCafferty voted for a 0.25% hike in the benchmark rate to 0.75% for the fourth consecutive meeting.
GBP/USD was trading at 1.5646 from around 1.5596 ahead of the announcement, while EUR/GBP was at 0.8011 from 0.8035 earlier.
Meanwhile, European stock markets were mildly higher. London’s FTSE 100 rose 0.1%, the DJ Euro Stoxx 50 inched up 0.1%, France’s CAC 40 tacked on 0.1%, while Germany's DAX advanced 0.2%.
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