GBPUSD news - page 39
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
UK Construction Dives, Dragged by Weaker Housing
The construction sector in the UK, which accounts for some 6.3% of the total economy, suffered a steep decline by 2.6% between December and January, after increasing 0.6% a month before. On a year-on-year basis, output in the sector fell 3.1%, a significant deceleration from a 5.3% annual increase in December, the Office for National Statistics (ONS) stated today.
ONS analyst Kate Davies said in the press briefing today that the primary downward pressure on total construction came from a weakening housing sector, which fell 5% on the month in January, driven down by slowing mortgage lending and high house prices.
The ONS said weaker activity goes in line with other external indicators that have shown demand for mortgages and housing slowed down at the turn of the year. In January, the number of mortgage approvals for house purchase fell by 19.6% from the same month a year ago, as demand for mortgages waned on the back of high house price inflation.
According to the Bank of England's (BoE) latest summary of business conditions, "construction output growth had eased slightly, but had been robust overall at the start of this year."
"Construction growth had become more broad-based over the past year, as a slowing in house building growth had been largely offset by a recovery in commercial activity. Large house builders had continued to plan increases in output in 2015, although some smaller house builders reported that tight funding conditions and materials or skills shortages were constraining their activity," the BoE survey said.
The ONS also revised downward the whole fourth-quarter output in construction by one percentage point to a 2.2% decline, but said this revision provides no change to the total GDP growth in the fourth quarter (+0.5%). The final estimate of Q4 GDP is due later in March.
Markit/CIPS PMI survey for February showed business activity remained firmly above the contraction line for the 22nd consecutive month, with the headline PMI rising more than expected to 60.1, up from last month's 59.1. Markit's survey also showed business activity picked up in all three sub-categories of construction work, with residential activity again seeing the steepest rate of growth.
The ONS also informed earlier this week that both total industrial production and manufacturing declined unexpectedly in January, against expectations of a rebound. Manufacturing suffered a sudden decline in production between December and January, falling 0.5%, while total industrial production, which included data on the oil and gas industry in the North Sea, decreased 0.1% on a monthly basis, well below the estimate of a 0.2% rise.
source
GBP/USD forecast for the week of March 16, 2015
The GBP/USD pair broke down significantly during the course of the week, slicing through the 1.50 level. That is an area that begins a significant amount of support all the way down to the 1.48 level, and now that we close below there it appears of the British pound will continue to drop significantly from here. Ultimately, we believe that rallies will offer selling opportunities going forward, and as a result we are looking for a slight bounce that gives us an opportunity to sell, as well as a break down below the bottom of the range for the week. Either way, we have no interest whatsoever in buying.
source
GBP/USD weekly outlook: March 16 - 20
The pound fell to more than five-year lows against the broadly stronger dollar on Friday as dovish comments by Bank of England Governor Mark Carney highlighted the diverging monetary policy stance with the Federal Reserve.
GBP/USD hit a trough of 1.4700, the weakest since June 22, 2010, and was last at 1.4746, down 0.91% for the day.
BoE Governor Carney said Thursday that the recent strengthening of sterling could keep inflation low and result in a slower pace of rate hikes. He reiterated the remarks in a newspaper interview published on Friday.
Demand for the greenback continued to be underpinned by growing expectations that the Fed could start rising interest rates mid-year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, advanced 1.22% to 100.32 late Friday, a level last reached in April 2003.
Sterling was higher against the euro, with EUR/GBP at 0.7116, holding above the seven-year low of 0.7013 set on Wednesday.
The single currency weakened across the board after the European Central Bank started asset purchases under its trillion-euro stimulus program on Monday, pushing euro area bond yields to new lows. Lower bond yields make the euro less attractive to investors.
EUR/USD hit fresh 12-year lows of 1.0462 on Friday, before pulling back to 1.0496 in late trade, still down 1.31% for the day.
In the week ahead, investors will be focusing their attention on Wednesday’s Federal Reserve policy statement to see if it would drop its reference to being patient before raising rates. Wednesday’s U.K. jobs report and BoE minutes will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
read more
GBP/USD: Pound Crawls Back Towards $1.48
The UK pound added firm gains on Monday morning, recovering somewhat after Bank of England Governor Mark Carney's comments last week sent sterling to its lowest mark since 2010.
Rather dovish comments from Mark Carney anddisappointing economic data from the UK construction sector sent the pound to $1.4697 last week, it's lowest since June 2010. Sterling pared back some of the losses and rose on Monday, during the late Asian trade, up 0.30% to $1.4770.
"This unexpectedly dovish tone could well change again later this week, especially if average earnings data continues to push up away from the 2% level. In December we saw them jump from 1.7% to 2.1%, and a further gain could well help put a temporary floor under the pound particularly against the US dollar, where it has lost a lot of ground in recent days," Michael Hewson, chief analyst at CMC Markets UK, wrote on Monday.
Nevertheless, the most anticipated event on the cable currency pair this week will undoubtedly be the FOMC meeting on Wednesday. Many traders expect that the "patience" stance will be dropped from the policy statement, igniting speculation that the interest rate hike in the US could be brought forward to the beginning of the summer.
Technical analysis
At first sight it looks like sterling is bottomless but weekly charts are now offering a very nice support zone around $1.4800 levels, where the previous swing low and double bottom from 2013 lies.
Short intraday timeframes are showing a steady and strong downtrend with symmetrical swings of lower highs and lower lows.
If any spikes occur, $1.49 will very likely work as a resistance as a 23.6% retracement level of a Fibonacci sequence is placed there.
source
GBP/USD: Pound Remains Cautious Ahead of FOMC
Sterling remains little changed after the previous rally, with traders now shifting their attention to the Federal Reserve (Fed) meeting starting Tuesday, where central bank policymakers are expected to drop the word "patience" from the forward-guidance language, igniting speculation that the interest rate hike in the US could be brought forward to the beginning of the summer.
Furthermore, the Bank of England (BoE) will publish the minutes of March's Monetary Policy Committee meeting on Wednesday, which saw the key interest rate remain at a record low 0.5%.
The pound rose well above $1.48 in the previous session, bouncing back from $1.4697 seen last week, it's lowest since June 2010. The cable currency pair traded 0.06% higher at $1.4834 ahead of the European open.
Technical analysis
At first sight it looks like sterling is bottomless but weekly charts are now offering a very nice support zone around $1.4800 levels, where the previous swing low and double bottom from 2013 lies.
Short intraday timeframes are showing a steady and strong downtrend with symmetrical swings of lower highs and lower lows.
If any spikes occur, $1.49 will very likely work as a resistance as a 23.6% retracement level of a Fibonacci sequence is placed there.
source
GBP/USD: Pound Remains Cautious Ahead of FOMC
Sterling remains little changed after the previous rally, with traders now shifting their attention to the Federal Reserve (Fed) meeting starting Tuesday, where central bank policymakers are expected to drop the word "patience" from the forward-guidance language, igniting speculation that the interest rate hike in the US could be brought forward to the beginning of the summer.
Furthermore, the Bank of England (BoE) will publish the minutes of March's Monetary Policy Committee meeting on Wednesday, which saw the key interest rate remain at a record low 0.5%.
The pound rose well above $1.48 in the previous session, bouncing back from $1.4697 seen last week, it's lowest since June 2010. The cable currency pair traded 0.06% higher at $1.4834 ahead of the European open.
Technical analysis
At first sight it looks like sterling is bottomless but weekly charts are now offering a very nice support zone around $1.4800 levels, where the previous swing low and double bottom from 2013 lies.
Short intraday timeframes are showing a steady and strong downtrend with symmetrical swings of lower highs and lower lows.
If any spikes occur, $1.49 will very likely work as a resistance as a 23.6% retracement level of a Fibonacci sequence is placed there.
GBP/USD: Sterling trades in narrow range, UK data in focus
Sterling inched higher before the European open, while traders have a whole lot of UK data to digest on today's schedule, before the conclusion of the FOMC meeting.
Wednesday's UK schedule includes domestic unemployment data and average earnings data, followed by the latest Bank of England (BoE) minutes as well as the final UK budget of this parliament.
The UK pound rose 0.06% to $1.4754 ahead of the European open, with the cable currency pair remaining near it's June 2010 low of $1.4700 seen last week.
The unemployment rate in Britain has been falling sharply over the last two years, from 8.4% in January 2012 down to 5.7% in the quarter to December last year. In the three months to January, the jobless rate is estimated to have fallen further to 5.6%, while average earnings growth, excluding bonuses, is expected to have bounced back to 1.8% in the quarter to January, up from a rise of 1.7% in December, and 1.8% in November last year.
The average earnings data could also be a net positive, particularly if they build on the gains seen in the December numbers when they jumped from 1.7% to 2.1%. Expectations are for a rise from 2.1% to 2.2% in January, further widening the gap between wages and inflation in a positive fashion.
The BoE minutes could shed more light on Governor Mark Carney's dovish speech from last week. Carney warned that "there is a risk that the combination of persistently low global inflation and the strength of sterling could weigh on prices here for some time." Carney also added, however, that the BoE's base interest rate will likely increase over the next few years as "a solid UK expansion, underpinned by strong domestic demand growth, leaves us on track to return inflation to target within the next two years."
"We finish off with the UK budget where the Chancellor of the Exchequer will well outline some key changes to fiscal policy. Some of these are likely to see significant moves in oil and gas stocks, particularly if the well trailed tax breaks come in as expected," Michael Hewson from CMC Markets UK wrote on Wednesday.
read more
UK wage growth slows – GBP/USD loses 1.47
Disappointing UK data: the average wage growth slowed down to 1.8%, significantly lower than 2.2% expected. Also when including bonuses, earnings rose only 1.6%, short of 1.8% that was on the cards.. The unemployment rate also fell short of predictions: 5.7%. Jobless Claimant Count Change came in within expectations at a drop of 31K. The MPC voted unanimously to maintain the current historically low interest rate at 0.50% at 9:0.
GBP/USD falls below 1.47. The new bottom is 1.4680. Update: cable continues even lower.
Also against the euro, GBP is on the back foot, with EUR/GBP above 0.72.
At the time of the meeting, the pound was relatively stronger and this was mentioned in the minutes: they said that a stronger sterling could prolong the below target inflation expectations. The members led by Mark Carney say that divergent monetary policy could put upwards pressure on GBP.
Regarding wage growth, they say that it is growing slightly faster than forecast. Well, they did not have the most recent data.
The previous jobless claims numbers were revised to a drop of 39.4K from 38.6K originally reported.
The UK was expected to report a fall of around 30K jobless claims in February, somewhat lower than -38.6K seen in January (before revisions). The unemployment rate for January was predicted to drop to 5.6% from 5.7% in December. Average hourly earning carried expectations for ticking up from 2.1% to 2.2%. At the same time, the MPC meeting minutes were released.
GBP/USD was on the back foot towards the release, trading just under 1.4750.
source
GBP/USD: Pound to Target $1.42 As Investor Attraction Evaporates
The UK currency will continue to weaken and may fall as low as $1.42/$1.43 over the next month, according to analysts from FXTM.
The UK currency recently slid to a five year low, as the wage data released in the UK earlier today failed to match analysts' forecasts and the latest MPC minutes revealed a rather dovish tone.
Sterling fell 0.49% and traded at $1.4674 against its US counterpart, rebounding slightly from the intraday lows hit earlier in the session.
The decline in wages will most likely strengthen the Bank of England’s (BoE) already dovish views on inflation.
"The GBPUSD has now nosedived from 1.55 to 1.46 in just over three weeks, although I personally think that the pair will continuing sliding down the charts over the next month and target 1.42/1.43. There is just a complete lack of investor attraction towards the UK currency, with concerns stretching further than the BoE’s laissez-faire attitude towards raising UK interest rates,", Jameel Ahmad from FXTM said in his research note.
"The UK economy is also encountering completely unexpected inflation risks following the dramatic drop in the price of oil, and with the ECB launching QE meaning that the euro has entered a new era of currency weakness, downside inflation pressures will remain on the UK economy beyond the first half of this year," he added.
FXTM also referred to the approaching UK election adding more pressure to the pound, whose volatility is at its highest level since the Scottish Referendum, showing that investors are nervous about the event ahead.
"The Scottish Referendum last September created completely unexpected GBPUSD volatility and after declining from 1.66 to 1.60 in a couple of days, the pair failed to recover its momentum and has continued falling since."
"If the UK election is as close as the latest opinion polls suggest and volatility rises further as a result - a potential move to the low 1.40’s for the GBPUSD is on the cards," the research note concluded.
source
GBP/USD: Sterling Gallops as 'Patient' Vanished, But Meaning Remained
The British pound rebounded to the green territory and rallied against its US counterpart on Wednesday, following the more-dovish-than-expected FOMC monetary policy statement and economic projections - followed by Fed chair Janet Yellen's presser.
The so-called cable was seen 1.87% higher to trade at $1.4921. Earlier during the European trading session, the pound fell to a fresh five-year low versus the greenback at $1.4633.
The move came as the greenback fell across the board. In fact, the US dollar index - measuring the greenback's strength against a basket of six major peers - declined to 98.18, down from about 99.40 seen minutes prior to the publishing of the FOMC statement.
'Patient' removed, but its meaning remained
While the central bank removed its explicit patient pledge, other aspects of the Fed’s statement, including the Summary of Economic Projections, implied that the central bank could still be "patient" with rate hikes.
Moreover, the central bank essentially ruled out an interest rate increase at its next meeting, stating that, "an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting."
Even more importantly, the median estimate for end-2015 interest rates (the so-called "dot chart") was revised down from 1.125% in December to just 0.625% today; the end-2016 forecast was also revised down to 1.875% from above 2.5%.
The Fed also lowered its estimates for real GDP growth across their entire forecasting window - a particularly important output for traders, as it may indicate that the widely expected June rate hike may be postponed. For 2015, the Fed lowered growth forecasts to 2.3%-2.7% of GDP, down from 2.6%-3.0%.
Still, the June rate hike was not explicitly ruled out, with chair Janet Yellen stressing the decision would be data dependent.
read more