GBPUSD news - page 27
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GBP/USD forecast for the week of December 1, 2014
The GBP/USD pair tried to rally during the course of the week, but as you can see struggled to keep the gains in ended up forming a shooting star. The shooting star of course is a sign that the market will continue to go lower, but at the end of the day we feel that the market should continue to go lower that being the case it appears that the market is ready to head down to the 1.55 level, and possibly even 1.50 level. Rallies at this point time should continue to be selling opportunities.
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GBP/USD rises on upbeat U.K. manufacturing data
The pound rose against the U.S. dollar on Monday, pulling away from a 14-month trough after the release of upbeat U.K. manufacturing data, although demand for the greenback continued to be broadly supported.
GBP/USD hit 1.5690 during European morning trade, the session high; the pair subsequently consolidated at 1.5674, adding 0.22%.
Cable was likely to find support at 1.5504 and resistance at 1.5743, Friday's high.
The pound found support after market research group Markit said that its U.K. manufacturing purchasing managers' index rose to a four-month high of 53.5 last month from a reading of 53.2 in October.
Analysts had expected the index to inch down to 53.1 in November.
A separate report showed that U.K. net lending to individuals rose by £2.6 billion in October, less than the expected £2.8 billion increase, after a £2.7 billion rise in September.
Meanwhile, demand for the dollar remained broadly supported as U.S. oil prices fell more than 2% on Monday, extending a broad based selloff in the wake of last Thursday’s decision by the Organization of the Petroleum Exporting Countries not to cut output quotas.
Sterling was also higher against the euro, with EUR/GBP slipping 0.11% to 0.7951.
Earlier Monday, Markit said that its German manufacturing PMI hit a 17-month high of 49.5 in November, down from a preliminary reading of 50.0. The index stood at 51.4 in October.
Markit also reported that its euro zone manufacturing PMI ticked down to 50.1 last month from 50.4 in October. Analysts had expected the index to remain unchanged last month.
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Pound Jumps Most in Seven Weeks With U.K. Growth Beating Peers
The pound jumped by the most in almost seven weeks versus the dollar, rallying from its lowest level in more than a year, as U.K. manufacturing expanded faster in November than economists predicted.
Sterling rose for the first time in three days against its U.S. counterpart, and climbed versus all but two of its 16 major peers as the data added to evidence that the U.K. has one of the strongest economies in the developed world. While the Bank of England said mortgage approvals fell to the lowest in more than a year in October, the number exceeded the median of estimates in a Bloomberg News survey.
“The pound still seems to be something which in fundamental terms could be a buy,” said Stuart Bennett, head of Group of 10 currency strategy at Banco Santander SA in London. “You’ve still got an economy that is doing OK.”
The pound climbed 0.6 percent to $1.5737 at 3:24 p.m. London time, the biggest increase since Oct. 15. It slid earlier to 1.5586, the lowest level since September 2013. Sterling strengthened 0.3 percent to 79.33 pence per euro, having touched 79.77 pence, the weakest level since Nov. 21.
Bank of England Governor Mark Carney told lawmakers in London last week that increases in borrowing costs would likely be limited and gradual. Still, the pound is being supported as his counterparts in the European Central Bank and Bank of Japan expand stimulus. The U.K.’s main interest rate of 0.5 percent compares with an upper limit of 0.25 percent in the U.S. and 0.05 percent in the euro area.
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Bank of England holds key interest rate at 0.5%
The Bank of England on Thursday held the size of its bond-buying program steady and left its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee maintained its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($588.65 billion). The minutes from the December meeting will be published on Dec. 17.
GBP/USD forecast for the week of December 8, 2014
The GBP/USD pair tried to rally during the course of the week, but as you can see struggled above the 1.58 level as the nonfarm payroll numbers showed real strength in the United States. The resulting candle is the second shooting star in a row, and as a result we feel that the GBP/USD pair will continue to go much lower. We are still above the 1.55 level though, which of course is a significant support level on the longer-term charts. With that being the case, the market will more than likely test that area and finally break below and go much lower.
Any rally at this point in time looks very suspicious to us, and we will continue to short the British pound, at least against the US dollar as it is the strongest currency in the world. The 1.50 level of course will be attractive to longer-term traders as well, so it would make sense to see this market go down and test that level. With this, the market is one that we cannot buy at this point in time, as the GBP/USD pair has substantially broke below the 61.8% Fibonacci retracement level.
It is not until we get above the 1.60 level that we would consider buying this pair and that the trend may have been broken. Ultimately, the market is one that we feel the sellers are in control oh, as the US dollar is favored against everything. The British pound itself isn’t so bad, but the truth is that you really can’t sell the US dollar against anything right now, be it another currency or commodity. The world favors the US dollar, and the fact that we had a stronger than anticipated nonfarm payroll number come out it makes sense that it will continue to do so. The US dollar continues to be the strongest currency out there for the next couple of months in our opinion, and as a result we are sellers of this pair going forward. We do expect a massive bounce off of the 1.50 handle though if we get down to that area.
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GBP/USD Forecast Dec. 8-12
The British pound moved higher earlier in the week but couldn’t consolidate the gains and showed modest losses on the week. The pair closed at 1.5568. This week’s key event is Manufacturing Production. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD.
In the US, Non-Farm Payrolls report was outstanding with a 321K job gain in November and finally a bump in wages. This allowed the dollar to post gains late in the week against the pound. In the UK, PMIs were a mix and the BOE held the course with QE and interest rate levels.
* All times are GMT
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BOE Looks Beyond Rate Guidance in U.K. Bank Stress Test
The Bank of England is willing to put aside its own forward guidance to determine how well the country’s eight largest lenders would fare in a crisis.
Governor Mark Carney has said rate increases from the current record-low 0.5 percent are likely to be gradual and the peak in rates lower than in previous cycles. Yet in its stress test of the U.K.’s eight largest banks, the BOE assumes an increase to 4 percent by the end of 2015.
“You could argue that going to 4 percent is against their own policy,” said Charles Goodhart, a former member of the Bank of England’s Monetary Policy Committee and a professor at the London School of Economics. “I think it’s actually quite courageous, and better than the ECB did, to include in the scenario a feature which in some sense is against their current policy.”
The BOE scenario will examine whether U.K. lenders could survive the interest-rate spike coupled with an economic and financial catastrophe so severe that it’s only happened once in the last 150 years. How they fare will be revealed on Dec. 16.
The BOE tests will be the first in Europe to factor in monetary policy actions. The European Banking Authority and European Central Bank were criticized for failing to include deflation in the scenarios for their joint stress test in October. The ECB test uncovered capital shortfalls totaling 25 billion euros ($30.7 billion) at 25 euro-area banks, all but eight of which had already plugged the gaps or satisfied the ECB with plans to shrink.
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GBP/USD holds steady near 15-month trough
The pound held steady against the U.S. dollar on Monday, hovering close to a 15-month trough as demand for the greenback remained broadly supported by Friday's upbeat U.S. jobs data.
GBP/USD hit session lows of 1.5541 during European late morning trade, the pair's lowest since September 2013, before pulling back to 1.5588.
Cable was likely to find support at 1.5504 and resistance at 1.5697, the high of December 5.
The dollar remained broadly supported after the Labor Department reported on Friday that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
September’s figure was revised up to 243,000 from a previously reported 214,000 and the unemployment rate remained unchanged at a six-year low of 5.8%.
The strong data fuelled to expectations for the Federal Reserve to raise interest rates mid-2015, compared to expectations for September 2015 before the report.
Sterling was higher against the euro, with EUR/GBP shedding 0.25% to 0.7863.
In the euro zone, data earlier showed that German industrial production rose just 0.2% in October, while September’s figure was revised down to 1.1% from 1.4% previously. The data fuelled concerns over the outlook for fourth quarter growth.
U.K. Industrial Output Drops Unexpectedly In October
U.K. industrial production fell unexpectedly in October due to a contraction in manufacturing, signaling a weak start to the fourth quarter.
Industrial production fell 0.1 percent from September, when it rose 0.7 percent, the Office for National Statistics said Tuesday. Production was expected to expand by 0.2 percent.
Manufacturing output declined 0.7 percent month-on-month in October, which was the largest drop since May 2014 and the first fall in five months. Economists had forecast production to grow 0.2 percent after rising 0.6 percent in September.
Among the main four components of production, only manufacturing registered a decline, while mining climbed 2 percent and electricity and utilities gained 0.6 percent.
On a yearly basis, total production advanced 1.1 percent reflecting rises in mining and manufacturing components in October. But the annual rate was slower than an expected 1.8 percent and September's 0.8 percent increase.
Manufacturing increased only 1.7 percent in October, while the rate was expected to accelerate to 3.2 percent from 2.2 percent seen in September.
Whilst the recovery is currently dependent on the dominant services sector, Capital Economics UK economist Paul Hollingsworth said he is hopeful that it will broaden out again to the manufacturing sector in 2015.
The weak start to industrial production in the fourth quarter increases the risk that GDP growth will ease back further after moderating to 0.7 percent quarter-on-quarter in the third quarter, IHS Global Insight's Chief UK Economist Howard Archer said.
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U.K. goods trade deficit narrows to £9.6 billion in October
The U.K.’s goods trade deficit narrowed less than expected in October, official data showed on Wednesday.
In a report, the U.K. Office for National Statistics said the country's goods trade deficit narrowed to a seasonally adjusted £9.62 billion in October from a deficit of £10.51 billion in September. Economists had expected the goods trade deficit to narrow to £9.53 billion.
U.K. trade data shows the extent of import and export activity, a key contributor to the overall economic growth of the U.K.
GBP/USD was trading at 1.5678 from around 1.5677 ahead of the announcement, while EUR/GBP was at 0.7898 from 0.7899 earlier.
Meanwhile, European stock markets held on to gains. London’s FTSE 100 picked up 0.3%, the EURO STOXX 50 advanced 0.65%, France's CAC 40 rose 0.4%, while Germany's DAX tacked on 0.75%.