GBPUSD news - page 69
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BOE says banks will need between £2.2-3.3bn as ring fencing capital
BOE/PRA out with a paper on bank risk controls
The key in all this is the cost issue. If banks deem those too high then they'll probably look to get shot of the area that will cost them. We're already seeing a flood of banks getting out of their direct commodities businesses due to the slump in that market, and it won't take much for them to shed other areas
While it may mean the banks have less risk on their books it also has a detrimental effect for liquidity, which is potentially bad news for us traders, and it also shifts the risks onto other intermediary trading houses that will try to pick up the slack
GBP/USD: Pound Struggles to Reach $1.55
The UK currency moved slightly higher against the US dollar on Friday but was unable to break above the $1.5500 area.
Sterling rose 0.18% and traded at $1.5478 against the US dollar after a rebound from the intraday low of $1.5438 seen earlier in the session.
With no macro data on the calendar, traders' attention will be shifted to a speech that the Bank of England's policymaker Kristin Forbes will deliver at the Brighton Summit later today.
The pound received a major boost this week following the labor data release showing that the unemployment rate in the country fell to the lowest level in 7 years. On the other hand, wage growth was slightly lower than expected, slowing to 2.8% from 2.9%.
Commenting on the report, Citi economist Michael Saunders said that productivity was now growing at about 1.5% a year, much faster than the past few years. Given the current pace of productivity growth, wages would need to grow about 3.5% a year to push inflation up to the Bank of England's 2% target, he added.
GBP/USD: Sterling Holds Steady But Fails to Break $1.55 Barrier Greenbacks were being sold as the pair jumped a couple of points to $1.5472 after highs of $1.5489. Though edging higher, the cable has failed to break the $1.55 handle. It is expected if this is breached the bearish trend would be canceled out.
As no economic data was forthcoming, the pound was relying on Chinese President Xi Jinping's official visit to the UK in an effort to firm bilateral relations, which Chancellor George Osborne hopes will lead to a "golden decade", and the echoes of Kristin Forbes' comments.
Bank of England Monetary Policy Committee member Kristin Forbes stated on Friday: "Although the risks and uncertainties in the global economy have increased, the widespread pessimism is overstated."
Her speech also mentioned, "Despite the 'doom and gloom' sentiment, the news on the international economy has not caused me to adjust my prior expectations that the next move in UK interest rates will be up and that it will occur sooner rather than later."
Recent MPC meetings have sided with keeping rates steady at a ratio of 8:1, with Ian McCafferty the lone dissenter. Forbes' recent comment put her in that rate-setter's camp and may signal a sea change after positive employment figures in the UK last week.
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GBP/USD: Sterling Trades Sideways in Quiet Trading The pound was trading sideways in the European session on Friday around the $1.54 level. In the previous session it saw a sharp rally to near the $1.55 handle in the post UK retail sales euphoria, before sliding back down.
Sterling's imminent reaction to the upbeat UK retail sales data was an uptick to a one-week high of $1.5508 on Thursday. However, the greenback received powerful support in the form of solid US data, especially existing home sales in September.
The GBP/USD was seen 0.10% higher at $1.5408 on Friday, having fallen as low as $1.5375 in the Asian session.
"There was further evidence that the Bank of England should be the first G7 nation to raise rates after UK retail sales rose a whopping 6.5% year-over-year. The US dollar acted as the major counterparty to euro-selling following the ECB press conference causing a large daily reversal in cable," Jasper Lawler from CMC Markets UK commented on Friday.
On Thursday, the European Central Bank (ECB) left monetary policy unchanged, although Mario Draghi hinted at the expansion of the QE program in December, which smacked the euro across the board.
The most important outcome from the ECB meeting was Draghi laying the groundwork for additional policy easing, stating that the Governing Council would "re-examine" the "degree of monetary accommodation" at the December policy meeting.
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GBP/USD: Pound Drops After Chinese Act, Extends Weekly Loss The British pound extended its weekly drop on Friday, as bears showed momentum following the unexpected rate cut by the People's Bank of China (PBoC).
In addition, the greenback received some support from the US macro data, as the PMI manufacturing hit the highest value in five months.
On the other hand, some analysts began questioning the impact on the probability of a rate hike by the Federal Reserve, as a stronger buck offsets inflation pressure.
"A further USD appreciation should make the FOMC even more reluctant to hike," Commerzbank head of FX strategy Ulrich Leuchtmann said. "However, market participants are not really expecting significant US rate hikes for the foreseeable future anymore."
On Friday, the cable was trading with a loss of 0.30% at $1.5345, falling from an intraday high of $1.5419, while the US dollar index spiked to the highest level since August 12 at 97.14 points.
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GBP/USD forecast for the week of October 26, 2015 The GBP/USD pair initially tried to rally during the course of the week, but found enough resistance at the 1.55 handle the turn things back around. By doing so, the market looks as if it is ready to head back down towards the 1.52 handle, so therefore we are sellers. However, we think that the market is far too tight for longer-term traders to take advantage of. Because of this, we feel that the shorter-term traders will probably be the ones attracted to this market and selling the Pound.
GBP/USD: Cable Remains at Daily Highs During London Session The GBP/USD pair was seen 0.25% stronger on Monday, trading around $1.5345 during the London session as volatility was calm, due to no major macro data.
From the US dollar point of view, new home sales for September are due later in the session and are expected to post a 1.3% month-on-month decline and drop from 552,000 to 545,000.
Traders will also eye the Federal Open Market Committee meeting, which concludes on Wednesday. The Federal Reserve (Fed) is not expected to raise rates, although the statement is expected to confirm that the Fed is still ready to hike rates at its December meeting.
Sterling traders will eye today's CBI indicators for October, but they are not expected to spur any significant trading activity as these data are considered to be only light.
Macro figures of more importance will be released on Tuesday when the first estimate of UK Q3 GDP will be published, which should tick lower from 0.7% to 0.6% quarter-on-quarter, while the yearly change is expected to remain at 2.4%.
"Cable has closed back beneath its 200 DMA after failing to break through 1.55. In doing so it has also dropped back through a broken downward RSI trendline, opening further downside momentum which could carry the pair back to 1.52, the October 13 low," Jasper Lawler, market analyst at CMC Markets UK, said on Monday.
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