GBPUSD news - page 3
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GBP/USD forecast for the week of July 14, 2014
The GBP/USD pair fell during the bulk of the week, but did get a little bit of a bounce towards the end of the 1.71 level. That being the case, it appears that the market is still ready to continue going higher, and we believe that the 1.70 level will continue to be a bit of a “floor” in this market. Ultimately, we suspect of this pair goes to the 1.75 handle, and see nothing on this chart the changes our opinion about that. Pullbacks should continue to offer buying opportunities.
GBP/USD Forecast July 14-18
The high-flying pound took a breather last week, as GBP/USD posted modest losses. The pair closed at the round number of 1.71. This week’s highlights are CPI and Claimant Count Change. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.
British Manufacturing Production surprised with a sharp drop, while NIESR GDP Estimate posted another strong gain. As expected the BOE held interest rates at 0.50%. In the US, the FOMC minutes did not shed any light on possible interest rate hikes, and Unemployment Claims looked sharp.
* All times are GMT
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Business Interest rates Mark Carney faces an almost impossible decision on
House prices are running away with themselves, headlines warned until recently. Now property values, even in the most fashionable parts of London, are cooling. Employment is booming, but mainly among the self-employed. Inflation? Well, no one knows where that is heading.
To say there is confusion at the heart of economic policymaking is an understatement. What seemed certain only a few months ago is no longer so. Earlier this year, interest rate rises were unlikely until the summer of 2016. A month ago, the City was speculating they could start as early as November, with another before the general election next May. Last week, the odds on a November rise began to lengthen and bets on a delay until the summer of 2015 became increasingly popular.
In a febrile, unsettled climate, beset by uncertainties – from last week's collapse of Portugal's third largest bank (a warning of worse to come in the eurozone?) to the Scottish referendum – the nation is hanging on every word from the Bank of England over the prospect of higher interest rates. Mark Carney doesn't need to be told he is in the spotlight or that he is in a difficult position.
At the moment households and businesses are responding to the confusion with a conservative approach, probably after reading the headlines that followed Carney's springtime revisionist speeches in which he concluded that Britain's economy was healthier than previously thought. One of the more comprehensive surveys shows 60% of households expect rates to rise this year.
Bank officials look at this response with satisfaction. They think it is not just Carney's speeches but the weight of reports and interviews by other monetary policy committee members that has nudged people to prepare for a hike. They don't believe people are reacting to a flip-flopping, conflict-ridden committee that cannot make up its mind.
Yet the slowing of the economy as the summer approached has shown it may not be as strong or resilient as Carney suggested, especially in his Mansion House speech. So what are the mixed signals that have befuddled the brightest brains? Discussing them one by one might help.
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U.K. Business Confidence Highest Among Developed Nations
U.K 's business optimism was highest among the developed nations in June amid weakening global sentiment, results of Markit's Global Business Outlook survey showed Monday.
Business confidence in the U.K., in terms of expected future activity, employment and investment, came in highest among the the G4 economies, though the measure eased from February's record high.
The Markit Global Business Outlook Survey was carried out in June and is based on responses from a panel of 11,000 manufacturing and services companies. The survey is conducted three times a year.
Japan's business confidence surged in June after declining in the previous survey as fears of the effect of the April sales tax hike eased. This marked the highest levels of confidence since February 2013.
Business activity expectations remained unchanged in the U.S., though the employment index and the investment index declined to new lows in June.
That suggests that U.S. companies are more focused on cost control than any time since the global financial crisis. This was partly attributed to uncertainties regarding the cost impact of the new healthcare reforms.
Meanwhile, Eurozone's business confidence eased in June after the 3-year peak, but remained higher than average. Investment outlook was unchanged, but were weaker than those in other economies. Divergent patterns were seen with confidence waning in the core euro area, while rising in the periphery.
Business sentiments in France and Germany fell sharply in June, while Spain's business confidence held steady at a post-crisis high. Optimism rose to a 3-year high in Italy.
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Bunch of news for Pound coming. We should see some changes
U.K. inflation jumps to 1.9% in June from 1.5% in May
U.K. inflation jumps to 1.9% in June from 1.5% in May
U.K. June inflation rises to 1.9%, core CPI increases to 2%
Consumer price inflation in the U.K. accelerated more than expected in June, hitting the highest level since January, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation rose at a seasonally adjusted 1.9% last month, accelerating from 1.5% in May and compared to expectations for a reading of 1.6%.
Month-over-month, consumer price inflation increased 0.2% in June, compared to estimates for a 0.1% decline.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 2% last month, up from 1.6% in May. Analysts had expected core prices to rise 1.7% in June.
The retail price index increased 2.6% in June, above expectations for 2.5% and up from 2.4% in May.
The data also showed that the house prices index climbed 10.5% in May, compared to forecasts for a 10.2% gain and accelerating from a 9.9% increase in April.
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Pound Resumes World-Beating Rally on Rising Inflation
The pound resumed its world-beating rally after consumer prices increased at a faster pace than economists forecast, boosting the case for the Bank of England to increase interest rates.
Sterling rose for the first time in four days against the dollar as the Office for National Statistics said annualized U.K. inflation was at 1.9 percent in June from 1.5 percent the prior month. That compares with 1.6 percent forecast by analysts in a Bloomberg survey. The British currency strengthened at least 0.3 percent versus all of its 16 major peers. U.K. government bonds fell for a second day and a bond-market gauge of inflation expectations climbed from the least in four months.
“We are still seeing inflation surprise to the upside,” said Adam Cole, the head of Group-of-10 currency strategy at Royal Bank of Canada in London. “It should work towards lifting U.K. rate expectations, which is clearly why sterling is taking it positively. We would see value in expressing that view in the currency at these kind of levels.”
The pound rose 0.3 percent to $1.7140 at 10:39 a.m. London time, climbing from $1.7060, the weakest intraday level since June 30. Sterling strengthened 0.5 percent to 79.34 pence per euro, snapping a two-day decline.
Cole forecasts the U.K. currency will advance to 77 pence against the euro before the end of September. The median prediction of analysts compiled by Bloomberg is for sterling to strengthen to 79 pence.
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GBP/USD hits fresh 5-1/2 year highs on Yellen, U.K. data
The pound rose to fresh five-and-a-half year highs against the U.S. dollar on Tuesday, following dovish comments by Federal Reserve Chairwoman Janet Yellen and as earlir U.K. data continued to support.
GBP/USD hit 1.7192 during U.S. morning trade, the pair's highest since October 2008; the pair subsequently consolidated at 1.7156, climbing 0.42%.
Cable was likely to find support at 1.7060, the session low and resistance at 1.7874.
Ms. Yellen said the U.S. economy is continuing to improve but added that the recovery is not yet complete. She said that considerable slack still remains in the labor market and wage growth remains weak.
The remarks came during testimony to the Senate Banking Committee in Washington.
The Fed chair reiterated that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends.
Interest rates could rise sooner more quickly if the labor market was to improve more quickly than expected she said, but added that if the economic recovery is disappointing interest rates would remain accommodative.
Yellen's comments came after the Commerce Department reported that U.S. retail sales rose just 0.2% in June, below forecasts for a 0.6% increase. Retail sales for May were revised up to 0.5% from a previously reported 0.3%.
A separate report showed that manufacturing activity in New York state rose to a four year high this month. The Empire state manufacturing index rose to 25.6 from 19.3 in June. Analysts had expected the index to decline to 17.0.
The pound strengthened earlier, after the Office for National Statistics reported that consumer prices rose 1.9% on a year-over-year basis in June, accelerating from 1.5% in May and well above expectations of 1.6%.
Consumer prices ticked up 0.2% last month, the ONS said, compared to estimates of a 0.1% decline.
A separate report showed that the house price index climbed 10.5% in the year to May from 9.9% in the year to April.
The upbeat data added to signs that the economic recovery in the U.K. is deepening, bolstering expectations that the Bank of England will raise interest rates before the end of the year.
Sterling was also higher against the euro, with EUR/GBP declining 0.75% to 0.7912.
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British Business - July 16
REGULATOR PLANS 15 REFORMS TO STOP FOREX CHEATS
The Financial Stability Board has proposed 15 reforms in the wake of allegations of manipulation, and the launch of dozens of investigations around the world into banks. (thetim.es/1l117Y8)
CARNEY'S RATE-RISE REMARK WAS 'MEANT TO STOP BOND CRASH'
The governor of the Bank of England revealed that his surprise comment about interest rates last month was designed to puncture the complacency of markets and reduce the risk of a destabilising 1994-style bond market crash. (thetim.es/1mfsCwP)
BLINKX PLANS BUY-BACK TO 'BURN THE SHORTERS'
The management of Blinkx, the online video company hit by a bear raid earlier this year, is poised to launch a share buyback programme to shore up support for its stock after investors told the company to "burn the shorters". (thetim.es/Wg2soV)
The Guardian
UK INFLATION RISES IN JUNE ON FOOD AND CLOTHES PRICES
Food price rises and delayed summer clothes sales by high street retailers lifted Britain's inflation rate to a five-month high in June, well above forecasts. (bit.ly/1t0HAfO)
RICHARD BAKER TO TAKE OVER AS CHAIRMAN OF WHITBREAD
Richard Baker has taken his first prominent City role since the private equity-backed takeover of Alliance Boots in 2007, succeeding Anthony Habgood as chairman of Whitbread. (bit.ly/1jNxOhb)
TESCO CLASHES WITH FARMERS' UNION OVER NEW ZEALAND LAMB
Tesco is facing criticism from farmers for promoting New Zealand lamb at the height of the British season for the meat, despite its promises to back local producers. (bit.ly/1t0gWnb)
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