GBPUSD news - page 73
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Early USD demand sees cable below 1.5150 As European traders shuffle in on a cold winter's morning we're seeing some early greenback grabbing GBPUSD has been down to new session lows of 1.5144 before running into a few buyers. Expect more into 1.5130 and 1.5100. Rallies now to be sold into 1.5200.
Cable bears like me had 1.5190-1.5200 in mind as a key support area and I now expect that to turn to resistance all things being equal
The US$ buying has also seen EURUSD dip below 1.0610 before running into more demand into 1.0600 and has now bounced back to 1.0625 with other euro pairs also finding support
The cable dip has sent EURGBP up to 0.7013. Expect sellers into 0.7020 with more at 0.7035 and into 0.7050. Demand/support remains into 0.6980
GBP To Join EUR Slide Against USD; We Stay Short - Morgan Stanley
GBP is at risk ahead of Wednesday’s budget update by Chancellor Osborne, notes Morgan Stanley.
"A £20bln public service spending cut is projected over the course of this parliament. Surprisingly, the release of October fiscal revenues, which are a barometer of economic activity, saw the worst result since 2009. The UK economy runs high fiscal multipliers, suggesting tighter fiscal conditions easing activity could eventually delay the BoE from hiking rates," MS argues.
"Other factors adding to potential GBP weakness are related to the intensifying Brexit debate, the high 5.1% of GDP current account deficit and results of our sensitivity analysis showing an increasing impact of oil price swings to the performance of GBP," MS adds.
"The chance of GBP joining the EUR slide lower against USD is high," MS projects.
MS remains short GBP/USD in its portfolio targeting a move to 1.46.
UK Preview: BoE Policymakers to Reiterate Data-Driven Policy Path Given that global headwinds are among the primary reasons for the Bank of England's (BoE) cautiousness on the policy path, market participants will be pricking up their ears on Tuesday to note if there is any mention of the policymakers' sentiment about the latest security enhancements across Europe following the terrorist attacks in Paris last week, and the impact those events may have on the economy.
The events in Europe come against expectations that the US Federal Reserve (Fed) may begin with the first increase in interest rates as early as in December this year.
Otherwise, not much has changed since the November Inflation Report in terms of macro fundamentals, or the outlook for inflation, so we might not see any significant change in stance from the policymakers.
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US GDP revised to 2.1% – within expectations Within expectations: GDP growth was upgraded to 2.1%, within expectations.
Currency markets are stable.
The second estimate of US GDP was expected to show stronger growth of 2% annualized after originally reporting only 1.5% in the first estimate. This is based on a an assessment related to inventories: their drag on the economy was expected to be lighter than had been estimated originally. — more coming —
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Britain keeps 2015 growth forecast unchanged in new budget plan Nov 25 Britain left its official growth forecast for 2015 unchanged and increased its 2016 forecast slightly on Wednesday as finance minister George Osborne gave a half-yearly budget update.
Growth for 2015 was forecast to be 2.4 percent as forecast in July, Osborne told parliament, and for 2016 it was increased slightly to 2.4 percent from 2.3 in its July forecast.
"Even with the weaker global picture, our economy this year is predicted to grow by 2.4 percent, growth is then revised up from the Budget forecast in the next two years," he said.
GBP/USD: Sterling Climbs on Osborne's Autumn Statement The UK pound climbed above the $1.51 handle on Wednesday following UK Chancellor George Osborne's Autumn Statement.
Sterling rose 0.33% to $1.5133 against the greenback, marking an intraday high, while the session low was $1.5063.
"Domestically, focus is on the Autumn Statement, its implications for growth as market participants consider the fiscal outlook and the BoE’s plans for normalization," Eric Theoret, currency strategist at Scotiabank, said in a note.
GBP/USD: Sterling Falls Below $1.51 Ahead of Data Sterling fell below the $1.51 handle shortly after the EU open on Friday, while UK traders are expecting a busy domestic data feed later in the session.
The UK's pound is currently trading 0.09% lower at $1.5089, where it awaits the second estimate of the UK's Q3 GDP.
The second estimate of UK GDP is expected to remain unchanged at 0.5% quarter-on-quarter and 2.3% year-on-year.
"The British pound faces two very different scenarios of near seven-month lows versus the dollar but near eight-year highs versus the euro. Either way you swing it, the UK is caught in the middle of the extreme policy divergence between the US and Europe," Jasper Lawler from CMC Markets wrote on Friday.
"With Europe the biggest export destination for British businesses, you can understand Governor Mark Carney erring towards trying to combat sterling's strength versus the euro when he said rates are to remain low 'for some time'," Lawler added.
While the US Federal Reserve is expected to hike rates as early as in December this year, Bank of England (BoE) policymakers have turned more dovish again when commenting on the monetary policy path relative to both global and domestic economic growth expectations.
In late September, BoE Governor Mark Carney reiterated that in his view, "if the economy follows the path broadly consistent with this [August] forecast, then the decision [on rates], at least for me, will come into sharper relief around the turn of the year".
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UK Preview: Surveys to Show Moderate Rebound in Q4 Markit Economics' PMI surveys of the business activity in three main pillars of the UK's output side of the economy are due next week, starting with manufacturing data release next Tuesday.
Analysts' median expectation points to a slight deceleration to 53.6 in the manufacturing PMI index in November, after October's marked rebound to a 16-month high of 55.5. The latest official figures showed manufacturing output had decreased 0.4% in the third quarter, and was the main drag on the overall industrial production.
Construction remains one of the most volatile sectors. The November PMI, due next Wednesday, is expected to show activity slowed further to 58.6 from 58.8 in October. Still, the headline measure had been sitting comfortably above the neutral level for two-and-a-half years, but the pace of expansion weakened from the previous year, according to Markit.
The services sector, the UK's largest contributor to the total GDP, is seen ticking up slightly to 55 in November, from October's 54.9, and a 29-month low of 53.3 in September. Services were again the largest GDP driver in the third quarter, rising quarterly at the rate of 0.7%.
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Sterling Drops to 7-Month Low on Lack of Direction The UK calendar is pretty uneventful on Monday, but traders are already looking ahead to November manufacturing and services PMIs due later this week.
Cable ended last week at the lowest level for the month and hovered just above the $1.50 handle on Monday. The currency pair remained in a tight trading range, edging 0.14% lower to $1.5008, its lowest since April 23.
Analysts median expectation points to a slight deceleration to 53.6 in the manufacturing PMI index in November, after October's marked rebound to a 16-month high of 55.5.
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1 year UK inflation expectations drop in November to 1.2% from 1.4% Latest YouGov poll on inflation