GBPUSD news - page 15
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Pound steady after rebound from 10-month lows
The pound was steady against the dollar on Thursday after rebounding from 10-month lows in the previous session, but nerves over the prospect of Scottish independence looked likely to keep sterling volatile.
GBP/USD was last trading at 1.6201, dipping 0.06% on the day. On Wednesday the pair fell to lows of 1.6050, the weakest since November, before recovering to 1.6208 in late trade.
Cable was likely to find support at 1.6100 and resistance at around the 1.6280 level.
The pound rebounded after a new opinion poll on Scottish independence on Wednesday showed that support for the no campaign was back in the lead with 53% of voters.
The poll came after a number of recent polls indicated that support for Scottish pro-independence voters had increased ahead of the September 18 referendum.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on have sparked a broad based selloff in sterling in the past week.
Sterling had risen to intra-day highs earlier Wednesday after Bank of England Governor Mark Carney indicated that U.K. interest rates are likely to rise in the coming months.
Speaking in front of Parliament’s Treasury committee Carney told MP’s that the point at which interest rates will need to rise has moved closer.
He also said the BoE has a contingency plan to support financial stability in the U.K. if Scotland votes for independence.
Demand for the dollar continued to be underpinned by expectations for an early hike in U.S. interest rates. A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.
The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Elsewhere sterling edged higher against the euro, with EUR/GBP dipping 0.06% to 0.7962, off Wednesday’s three month highs of 0.8065.
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Pound Advances as Scotland Vote Concern Ebbs on Economic Outlook
The pound rose for a third day against the dollar as concern that Scotland will vote for independence next week ebbed amid optimism the U.K. economy is strengthening.
Sterling gained versus all of its 16 major peers after a Survation poll yesterday signaled a surge in support for Scottish nationalists had faltered. A report tomorrow will show construction output climbed in July for a second month, based on a Bloomberg survey of analysts. Data in the past week showed house prices, manufacturing and industrial production rose. The pound reached a 10-month low yesterday and volatility increased after a weekend poll put the pro-independence campaign ahead.
“The recovery is going on regardless of Scotland and the markets will get over it,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London, referring to increased pound volatility driven by independence surveys. Sterling also “regained some strength on the latest poll. There may have been people who sold on previous polls.”
The pound climbed 0.2 percent to $1.6248 at 1:13 p.m. London time after falling to $1.6052 yesterday, the lowest since Nov. 15. It advanced 0.7 percent yesterday, the biggest increase since June 12. Sterling appreciated 0.1 percent to 79.57 pence per euro after strengthening 0.8 percent yesterday, the most since February.
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GBP/USD almost unchanged after tepid U.K. construction data
The pound was almost unchanged against the U.S. dollar on Friday, after the release of tepid U.K. construction data as investors remained cautious ahead of an upcoming referendum on Scottish independance.
GBP/USD hit 1.6218 during European morning trade, the session high; the pair subsequently consolidated at 1.6247, inching up 0.06%.
Cable was likely to find support at 1.6168, the low of September 7 and a 10-month low and resistance at 1.6339, the high of September 5.
Markets shrugged off official data showing that U.K. construction output was flat in July, compared to expectations for a 0.7% rise, after an increase of 1.2%.
The pound remained mildly supported after a new opinion poll on Scottish independence released on Wednesday showed that support for the no campaign was back in the lead with 53% of voters.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on have sparked a broad based selloff in sterling in the past week.
Meanhile, demand for the dollar continued to be underpinned by expectations for an early hike in U.S. interest rates, despite data on Thursday showing that U.S. jobless claims rose more than expected last week.
A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.
The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Sterling was fractionally higher against the euro, with EUR/GBP easing 0.08% to 0.7952.
Later in the day, the U.S. was to release data on retail sales, as well as closely watched preliminary data on consumer sentiment.
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Hedging costs against sterling's swings soar on Scottish vote worries
The cost of hedging against near-term swings in the British pound jumped to four-year highs on Friday and investors added to unfavourable bets in the derivatives market, reflecting jitters about the result of the Scottish referendum.
One-week sterling/dollar implied volatility rose to a peak of 15.525 percent, according to Reuters data, its highest since mid-2010. The one-week options will expire on Sept. 19, the day after Scotland's vote on independence from the United Kingdom, when the results should be announced.
In the derivatives market, the one-week and one-month sterling/dollar risk reversals, a gauge of demand for options on a currency rising or falling, showed an increasing bias for sterling weakness.
In the spot market, sterling slipped to $1.6221, failing to build on earlier gains in Asia but still above the 10-month low of $1.6051 struck on Wednesday. It hit a high of $1.6277 in Asian trading after a YouGov survey showed those in Scotland who intended to vote against independence were gaining the upper hand.
The euro rose against the pound to 79.68 pence, on track for second week of gains.
Sterling's dip came despite another poll, the Guardian/ICM poll, showing support for the union at 51 percent and nationalists on 49 percent, with "don't knows" excluded. Traders said investors were staying away from the pound before the weekend given all the risk involved.
"A `Yes' vote would be a game-changer. The uncertainty and what it would mean for UK monetary policy would easily justify sterling/dollar trading close to $1.50," said Chris Turner, head of currency strategy at ING.
He expects the "No" camp to win next week, in which case sterling would target a bounce to target $1.66.
Sterling is a prominent part of the debate over Scotland. The pro-independence leader, Scottish First Minister Alex Salmond, says Scotland will share the pound. Westminster has ruled that out, leading to uncertainty about how debt, North Sea oil revenues and the currency will be shared.
Investors fear that a Scottish split would leave Britain saddled with higher debt, a wider current account deficit and a smaller domestic market that could hurt future investments. More debt could also lead to a possible downgrade by rating agencies and outflows from Britain.
Investors pulled $27 billion out of UK financial assets last month - the biggest outflow since the Lehman crisis in 2008 - data compiled by London-based consultancy CrossBorder Capital showed, as worries about Scotland hit home.
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UK Suffers Biggest Capital Outflow Since Lehman As Scottish Vote Nears
Investors pulled $27 billion out of UK financial assets last month - the biggest capital outflow since the Lehman crisis in 2008 - as concern mounted about the economic and financial consequences if Scotland left the UK, according to Reuters. Furthermore, Morgan Stanley said daily equity flow data pointed to "some of the largest UK equity selling on record."
As Reuters notes,While some respite in GBP-selling has occurred in thge last few days as boisy polls show a slight bias to a "no" vote, as we warned previously - With a “no” vote, the UK would still face rising political uncertainties.
GBP/USD forecast for the week of September 15, 2014
The GBP/USD pair has fallen during the course of the week, but found enough support just above the 1.60 level in order to form a nice-looking hammer. This hammer of course is a very bullish sign, but what we find even more interesting is that the market has bounced off of the 50% Fibonacci retracement from the absolute lows. With that being the case, if we can break above the top of the hammer, we believe that the market should continue to go much higher and by convention, most traders would anticipate a return to the zero level on the Fibonacci retracement. In other words, the 1.72 level.
This could be a wonderful long-term opportunity for people to start buying the British pound. This is a move that has been exacerbated to the downside buying the Scottish Independence Referendum vote coming up on Thursday the 18th. With that being the case, we could be seeing sellers taking profits just in case the referendum does not suggest Scottish independence. If that’s the case, you can expect a massive bounce in the British pound. Quite frankly, we believe that the 1.60 level is supportive enough to keep this market afloat at least until then, so if we get short-term pullbacks that might be the entry point that you need in order to start going long.
If we break the bottom of the hammer, and more specifically the 1.60 level, we feel that this market then goes to the 1.57 level, and below there are things really get ugly as we head to the 1.50 handle. Judging by the action that we have seen in this pair this week, we feel that it’s more than likely that this pair is going to bounce from here. However, any time you have a vote, anything can happen. With that being the case it’s very likely that we will see a lot of volatility between now and Thursday, but if we get the right vote, this pair will more than likely shoot straight through the roof as traders will then begin to pay attention to the central bank’s head suggesting that interest rates rising is probably closer than most people understand.
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man, recommending a long term buying of GPB next week is not quite serious (too much bias for my taste)
GBP/USD weekly outlook: September 15 - 19
The pound moved higher against the dollar on Friday, but gains were held in check as concerns over the prospect of Scottish independence continued to dampen investor demand for the British currency.
GBP/USD was up 0.18% to 1.6267 in late trade, having recovered from the 10-month lows of 1.6050 struck on Wednesday.
Cable is likely to find support at the 1.6050 level and resistance at around 1.6340.
Sterling found support after two new opinion polls on the Scottish independence referendum showed that support for the no campaign was back in the lead ahead of the September 18 referendum.
The pound weakened across the board earlier in the week after another opinion poll indicated that support for Scottish pro-independence voters had gained momentum, fuelling concerns over the prospect of a yes vote.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take sparked a broad based selloff in sterling.
Speaking Tuesday, Bank of England Governor Mark Carney warned that a currency union between an independent Scotland and the rest of the U.K. would be “incompatible with sovereignty”.
EUR/GBP was up 0.13% to 0.7968 late Friday, off the two month highs of 0.8060 set on Wednesday.
Demand for the dollar continued to be underpinned by expectations for an early hike in U.S. interest rates as investors began turning their attention to the upcoming Federal Reserve policy meeting.
The Fed was expected to cut its asset purchase program by another $10 billion at its meeting on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.
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Sterling slips as Scotland vote, Fed eyed
Sterling slipped lower against the dollar on Monday as investors looked anxiously ahead to the outcome of Thursday’s referendum on Scottish independence and the Federal Reserve’s policy meeting on Wednesday.
GBP/USD dipped 0.10% to 1.6249, but remained comfortably supported above the 10-month lows of 1.6050 struck last Wednesday.
Cable was likely to find support at around 1.6185 and resistance at about 1.6280.
The latest opinion polls on the Scottish independence referendum indicated that the outcome of the vote is too close to call.
Concerns over the prospect of a yes vote sparked a selloff in the pound last week after polls indicated that support for the yes vote had edged into the lead for the first time since the start of the pro-independence campaign.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on have rattled financial markets.
Bank of England Governor Mark Carney warned last week that a currency union between an independent Scotland and the rest of the U.K. would be “incompatible with sovereignty”.
Market sentiment was hit on Monday after data over the weekend showed that Chinese industrial output slowed sharply last month, while separate reports showed that retail sales and fixed asset investment also slowed.
Chinese factory production rose just 6.9% annually in August, the slowest increase since March 2009, down from 9.0% in July.
The weak data sparked concerns over a slowdown in the world’s largest economy.
The dollar remained broadly stronger ahead of the upcoming Fed policy meeting amid mounting expectations for an earl hike in U.S. interest rates.
The Fed was expected to cut its asset purchase program by another $10 billion on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Pound Drops Toward 10-Month Low as CPI Matches Least Since 2009
The pound fell toward the weakest in 10 months versus the dollar after a report showed U.K. inflation slowed to match the lowest level in five years.
Sterling dropped versus all but two of its 16 major peers before the Bank of England publishes the minutes of this month’s policy meeting tomorrow. At August’s gathering, officials Martin Weale and Ian McCafferty voted to raise interest rates. U.K. government bonds today advanced before Scotland votes on independence in a referendum in two days that polls signal is too close to call.
“It looks like the pound was sold ahead of the CPI report,” said Gavin Friend, a currency strategist at National Australia Bank in London. “There may have been a flurry of downside risk on that. The risk is either Miles or McCafferty move back into the pack given the slightly weaker data.”
The pound fell 0.1 percent to $1.6216 at 3:49 p.m. London time after depreciating to $1.6052 on Sept. 9, the lowest since Nov. 15. Sterling slid for a third day against Europe’s shared currency, weakening 0.1 percent to 79.81 pence per euro.
Sterling dropped 2.8 percent in the past month versus the dollar as polls showing Scotland may vote for independence damped demand for the U.K. currency amid concern a split in the 307-year old union will destabilize the British economy.
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