GBPUSD news - page 28
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GBP/USD edges lower after weak U.K. construction data
The pound edged lower against the U.S. dollar on Friday, after the release of weak U.K. construction data and as Thursday's strong U.S. data continued to support demand for the greenback.
GBP/USD hit 1.5696 during European morning trade, the session low; the pair subsequently consolidated at 1.5708, slipping 0.15%.
Cable was likely to find support at 1.5645, the low of December 10 and resistance at 1.5828, the high of November 27.
In a report, the U.K. Office for National Statistics said construction output declined 2.2% in October, disappointing expectations for a 0.8% rise. Construction output rose 2.2% in September, whose figure was revised from a previously estimated 1.8% gain.
Meanwhile, the dollar remained supported after the U.S. Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the week ending December 6 decreased by 3,000 to 294,000 from the previous week’s total of 297,000.
Separately, the U.S. Commerce Department said that retail sales increased by 0.7% last month, beating expectations for a gain of 0.4%. Retail sales growth for October was revised up to a 0.5% increase from a previously reported gain of 0.3%.
Core retail sales, which exclude automobile sales, advanced by 0.5% in November, easily surpassing forecasts for a 0.1% increase. Core sales in October rose by 0.4%.
The strong retail sales numbers boosted expectations for the Federal Reserve to hike interest rates earlier in 2015 than once anticipated, possibly in the middle of the year.
Sterling was also lower against the euro, with EUR/GBP rising 0.35% to 0.7916.
Later in the day, the U.S. was to release data on producer prices and a preliminary report on consumer sentiment.
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GBP/USD forecast for the week of December 15, 2014
The GBP/USD pair broke higher during the course of the week, testing the 1.57 region. The fact that we done so far into the previous two shooting stars tells us that we could in fact see continuation as we have certainly seen quite a bit of pressure put on the resistance. However, we believe that the market should offer selling opportunities at higher levels. We are especially keen on selling at the 1.60 handle, as it should continue to be important based upon previous support, and now what we believe to be future resistance.
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Pound slides lower against stronger dollar
The pound was lower against the U.S. dollar on Monday, as recent concerns over the drop in oil prices and uncertainty over the outcome of the Federal Reserve's next policy meeting continued to weigh on market sentiment.
GBP/USD hit 1.5659 during European afternoon trade, the pair's lowest since December 11; the pair subsequently consolidated at 1.5670, sliding 0.30%.
Cable was likely to find support at 1.5624, the low of December 9 and resistance at 1.5756, the high of December 11.
Investor confidence was hit amid concerns over the economic impact of the continuing rout in oil prices and its effect on energy companies.
Markets were also jittery ahead of the Fed's upcoming policy meeting, as ongoing speculation over the prospects for a U.S. rate hike next year fuelled expectations that the U.S. central bank could adjust its forward guidance.
Sterling was steady against the euro, with EUR/GBP inching up 0.06% to 0.7933.
The euro remained under pressure after a surprise decision by the Greek government to bring forward a parliamentary vote for president to this week.
The move raised the prospect of snap elections if Prime Minister Antonis Samaras’ candidate is not approved by parliament, which could see the anti-bailout Syriza party take power.
Since the decision, government leaders have expressed fears that Greece could be forced to exit the euro zone if parliament failed to elect a new head of state by December 29.
Later in the day, the U.S. was to release reports on manufacturing activity in the New York region and industrial production.
Preview: UK Inflation to Ease in November
Consumer price inflation in the UK is expected to have slowed down again in November, after it temporarily ticked up the month before on higher transport costs.
Inflation rate in the UK has been slowing sharply over the last three years, falling from 5.2% in September 2011 down to 1.3% in October this year.
In November, economists expect the headline rate of CPI to have eased back to 1.2%, down from a temporary rise of 1.3% in October, when higher prices of transport and motor fuels pushed the overall index up. The Office for National Statistics (ONS) is releasing fresh data on Tuesday, December 16, at 9:30 AM GMT.
The Bank of England (BoE) forecasts the headline CPI to slow even further to 1%, or even below, at some point over the next six months, necessitating an open letter to Chancellor George Osborne.
As for the medium-term outlook, the BoE expects the CPI rate to remain at around 1% in the first quarter of next year, before crawling up to 1.1% in the second quarter of 2015. It then estimates inflation at 1.6% in the first quarter of 2016, down from the 1.7% it estimated in August. From the fourth quarter of 2016 onward, the outlook remains broadly unchanged when compared with the previous forecast, with CPI at around 2% in three-years time.
When asked about inflation expectations by WBP Online during the November Inflation Report press conference, Ben Broadbent, the BoE's deputy governor, noted that the lower inflation forecast for 2015 was mostly linked to commodity prices and import prices. "Most of the drop in a near term forecast is associated with the continuing effects of lower food and energy prices," Broadbent explained. The BoE expects import prices to fall 4% in the second half of 2014.
BoE should look through inflationary one-off effects
In his speech at the Institute of Directors in Liverpool on December 10, McCafferty argued that the BoE should "look through the impact of one-off effects on the headline inflation rate" which he said masked "a pickup in domestic inflationary pressure, requiring a more rapid policy response later on."
Those domestic pressures are wages and unit labor costs, which McCafferty said had been weak so far, but data suggests this is expected to change soon as spare capacity in the UK labor market has been tightening sharply over the recent quarters.
McCafferty's main argument was that "it takes some 18 to 24 months for the full effects of any change in interest rates to feed through to the economy. So I am thinking not only about the coming wage round in 2015 but about the wage round in 2016 when considering inflationary pressures over the policy horizon."
BoE Governor Mark Carney said last week that the BoE would increase its base interest rate despite the current low level of inflation.
“Our stimulus is flowing through the economy and that is appropriate because we are going to go through a period now where inflation is low – we think it is probably going to dip below one per cent, so I will be writing a letter to the Chancellor to explain why that is the case – and it will take some time before it starts to creep back up toward that two per cent target,” Carney said in an interview on December 10, reiterating earlier statements.
“What that means though, for this economy to have balance and inflation to get back to two per cent over the next few years, is that it is going to mean in all likelihood, in our opinion, that interest rates are going to have to increase,” the governor added.
A majority of BoE policymakers on the Monetary Policy Committee (MPC) do not see sufficient upward price pressure on inflation in their outlook, and have voted to keep the base interest rate at a record low. Two policymakers, Ian McCafferty and Martin Weale, argue that rapidly a tightening labor market should translate into increased price pressures earlier and stronger than expected.
Apart from those two dissenters, the latest MPC minutes revealed that the disagreement about the current outlook for inflation was forming even among the dovish majority of MPC members, who said there are risks looming on the upside.
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GBP/USD dips on upbeat U.S. industrial output report
The pound softened against a firming dollar on Monday after a widely-watched gauge of U.S. industrial production to beat expectations.
In U.S. trading on Monday, GBP/USD was down 0.37% at 1.5658, up from a session low of 1.5601 and off a high of 1.5747.
Cable was likely to find support at 1.5539, last Monday's low, and resistance at 1.5756, Thursday's high.
The Federal Reserve reported earlier that U.S. industrial production rose by 1.3% in November, beating expectations for a gain of 0.7%.
Industrial production for October was revised up to 0.1% from a previously reported decline of 0.1%.
The report added that the capacity utilization rate, a measure of how full firms are using their resources, rose to 80.1% last month from an upwardly revised 79.3% in October, beating market calls for an unchanged reading.
The data boosted demand for the dollar on expectations that the Federal Reserve will tighten policy next year.
The pound, meanwhile, continued to come under pressure from disappointing U.K. construction data released on Friday.
The U.K. Office for National Statistics reported that construction output declined 2.2% in October, disappointing expectations for a 0.8% rise.
Construction output rose 2.2% in September, whose figure was revised from a previously estimated 1.8% gain.
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.48% at 0.7967, and down against the yen, with GBP/JPY down 1.32% at 184.21.
On Tuesday in the U.K., the Bank of England is to publish its financial stability report. BoE Governor Mark Carney is to hold a press conference about the report.
The U.K. is also to release data on consumer inflation, which accounts for the majority of overall inflation.
The U.S. is to publish reports on building permits and housing starts.
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BOE sees rising threat from eurozone for U.K
The Bank of England Tuesday warned that continued low growth and inflation in the eurozone carries risks for the U.K. economy and the stability of its financial system.
In its twice-yearly Financial Stability Report, the BOE also said that while falling oil prices are good for global economic growth, they could "reinforce certain geopolitical risks" and may make it more difficult for U.S. shale oil and gas exploration firms to repay their debts.
The BOE Tuesday announced the results of its stress testing of eight major U.K. banks, which examined their resilience in the face of a 35% drop in house prices and a sharp rise in interest rates. It found that only one would need to raise more capital.
However, the BOE also expressed concerns about a possible reprise of 2011 and 2012, when concerns about the durability of the eurozone led to a sharp rise in funding costs for U.K. banks, and damaged consumer and business confidence.
Policy makers said there could be negative consequences for the U.K. if investors lost faith in the ability of the European Central Bank and other eurozone institutions to "achieve the rebalancing and adjustments required in the euro area."
"A further downward revision to growth and inflation prospects could lead investors to question again the sustainability of debt positions in the most vulnerable euro-area countries," it said.
The eurozone's annual rate of inflation stood at 0.3% in November, while its economy grew by just 0.2% in the third quarter. Most economists expect inflation and economic growth rates to remain very low in 2015.
The ECB has said it will review its monetary policy stance early next year, and indicated it may launch a program of government bond purchases in a further effort to boost growth and inflation. However, the ECB has made it clear that monetary policy alone won't be sufficient, and that governments will have to ease back on efforts to cut their budget deficits to raise investment spending, while also implementing reforms to labor and product markets.
A rise in borrowing costs for "vulnerable" eurozone members would be "most likely to occur if there were doubts about the credibility and effectiveness of policy measures taken to restore growth and raise inflation," the BOE said.
The BOE said that loss of confidence could lead to "a sharp rise in bank funding costs across Europe, as in 2011-12," but added that risk had been reduced by a broad improvement in the capital positions of European banks in the intervening years.
The BOE said should there be a fresh intensification of the eurozone's crisis, the U.K. economy would be directly affected by a decline in exports, while fresh doubts about the integrity of the currency area could lead consumers and businesses to cut back on spending.
But it said U.K. banks had cut back on their lending to the eurozone in the years since the height of the crisis in 2011 and 2012, while lending to U.K. borrowers by eurozone banks has also fallen.
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GBP/USD gains on soft U.S. housing reports
The pound strengthened over the dollar on Tuesday after disappointing numbers out of the U.S. housing sector hit the wire and weakened the greenback and gave investors room to shrug off soft U.K. inflation data.
In U.S. trading on Tuesday, GBP/USD was up 0.55% at 1.5723, up from a session low of 1.5614 and off a high of 1.5785.
Cable was likely to find support at 1.5599, Monday's low, and resistance at 1.5828, the high from Nov. 27.
U.S. housing starts fell unexpectedly last month, official data showed on Tuesday.
The Census Bureau reported earlier that the number of housing starts fell to 1.028 million units from 1.045 million in the preceding month whose figure was revised up from 1.009 million.
Analysts had expected the number of housing starts to rise to 1.030 million last month.
Building permits took a similar turn for the worse.
The Census Bureau reported that the number of building permits issued in November fell to 1.035 million from 1.080 million in the preceding month .
Analysts were expecting the number of building permits issued to fall to 1.060 million last month.
While a broader analysis of the U.S. housing sector still points to recovery, setbacks such as Tuesday's reports softened the greenback, namely as investors jumped to the sidelines to await the Federal Reserve's statement on monetary policy and interest rates due out on Wednesday.
Meanwhile across the Atlantic, the U.K. Office for National Statistics said the annual rate of consumer price inflation slowed to 1.0% last month from 1.3% in November. It was the lowest rate of inflation since September of 2002 and came in below forecasts for a 1.2% reading.
Consumer prices fell 0.3% on a month-over-month basis after a 0.1% increase in October, missing market calls for an unchanged reading.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 1.2% last month, down from 1.5% in October. Economists had expected an unchanged reading.
The report also showed that the U.K. house prices index rose just 10.4% last month, down from 12.1% in October.
Elsewhere, sterling was up against the euro, with EUR/GBP down 0.11% at 0.7944, and up against the yen, with GBP/JPY up 0.25% at 184.71.
On Wednesday, expect markets to move on the Federal Reserve's statement on monetary policy and interest rates.
Elsewhere, the U.S. is to release data on consumer inflation and the current account.
The U.K. is to release data on the change in the number of people employed, the unemployment rate and average earnings. In addition, the BoE is to publish the minutes of its latest policy meeting.
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UK wage growth accelerates to 1.4%, unemployment remains at 6%
The MPC voted 7:2 to leave the rates unchanged as expected. They do say that there are signs of wage growth and that they are promising. Indeed, for October we have a better than expected wage growth rate of 1.4%. However, the unemployment rate stays at 6%. Claimant count change for November came out better than expected with a drop of 26.9K.
GBP/USD is ticking higher, slightly extending its gains. Was the good news leaked out?
The minority that voted for a rate hike reasoned their vote by saying there is a chance of a sharp rise in wages as slack is been eaten up quite quickly.
Wages are now left, right and center in the debate regarding rates.
The UK was expected to report a drop of around 20K jobless in November. The unemployment rate was predicted to tick down to 5.9% in October after 6% in September. The average earnings index was predicted to accelerate its advance to 1.3% in October from 1% beforehand. At the same time, the MPC Meeting Minutes for the recent meeting in November were released. A 7:2 split against raising the rates was expected to be maintained.
GBP/USD traded around 1.5715, bouncing back from a slide to lower ground.
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GBP/USD rises on strong U.K. retail sales data
The pound rose against the U.S. dollar on Thursday, bouncing off of nearly 15-month lows as the release of strong U.K. retail sales data lent support to sterling.
GBP/USD hit 1.5659 during European morning trade, the session high; the pair subsequently consolidated at 1.5627, gaining 0.32%.
Cable was likely to find support at 1.5539, the low of December 8 and a 15-month low and resistance at 1.5757, Wednesday's high.
In a report, the Office for National Statistics said that U.K. retail sales rose 1.6% last month, compared to forecasts for a 0.3% gain. October’s figure was revised up to an increase of 1.0% from a previously estimated 0.8% gain.
On a year-on-year basis, retail sales jumped 6.4% beating expectations for a 4.2% gain, after rising at an upwardly revised annual rate of 4.6% in October.
Core retail sales, which exclude automobile sales, were up 1.7% and rose 6.9% from a year earlier. Economists had forecast a monthly increase of 0.4% and an annual gain of 4.5%.
Meanwhile, the dollar also found support after the Federal Reserve said it would be "patient" before raising rates, guidance which it said is consistent with earlier assurances statement that rates would stay low "for a considerable time."
The central bank acknowledged the improvement in the U.S. labor market and noted that the economy is making progress toward its goals in inflation and employment.
At the bank’s post policy meeting press conference Fed Chair Janet Yellen said the Fed was unlikely to raise rates for the "next couple of meetings" indicating that a move in April at the earliest is possible.
Sterling was also higher against the euro, with EUR/GBP retreating 0.64% to 0.7872.
Later in the day, the U.S. was to release data on initial jobless claims and manufacturing activity in the Philadelphia region.
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GBP/USD gains on upbeat U.K. retail sales figures
The pound strengthened against the dollar on Thursday on news U.K. retail sales came in far stronger in November than investors were expecting.
In U.S. trading on Thursday, GBP/USD was up 0.50% at 1.5656, up from a session low of 1.5549 and off a high of 1.5678.
Cable was likely to find support at 1.5543, Wednesday's low, and resistance at 1.5787, Tuesday's high.
The pound saw support after the Office for National Statistics reported earlier that U.K. retail sales rose 1.6% last month, well above forecasts for a 0.3% gain. October’s figure was revised up to an increase of 1.0% from a previously estimated 0.8% gain.
On a year-on-year basis, retail sales jumped 6.4% beating expectations for a 4.2% gain, after rising at an upwardly revised annual rate of 4.6% in October.
Core retail sales, which exclude automobile sales, were up 1.7% and rose 6.9% from a year earlier. Economists had forecast a monthly increase of 0.4% and an annual gain of 4.5%.
Meanwhile in the U.S., the U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Dec. 12 fell by 6,000 to 289,000 from the previous week’s revised total of 295,000. Economist had forecast an increase of 1,000, and the better-than-expected result gave the dollar support, though the U.K. retail sales figures held sway.
At the conclusion of its monthly policy meeting on Wednesday, the Fed said it would be "patient" before raising rates, guidance which it said is consistent with earlier assurances that rates would stay low "for a considerable time."
The U.S. central bank noted improvements taking place in the U.S. labor market and pointed out that the economy is making progress in terms of price and employment stability.
At the bank’s post-meeting press conference Fed Chair Janet Yellen said monetary authorities were unlikely to raise rates for the "next couple of meetings," leaving investors to conclude that a move in April at the earliest could be possible.
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