Pound Sterling Live on Monday: Outlook for Today is GBP-Positive; a Busy Week Lies Ahead

The British pound sterling (Currency:GBP) has started the new week off on the front foot with gains being made against most of the majors. We have an action packed week ahead, so stay in touch with Pound Sterling Live as we cover the major calendar events and bring you the latest forecast notes from the leading commentators we follow.

Exchange rates as of last update:

• Pound to Euro: 0.03 pct UP at 1.1816.
• Pound to US Dollar: 0.06 pct DOWN at 1.6159.
• Pound to Australian dollar: Unchanged at 1.6708.
• Pound to New Zealand dollar: 0.27 pct UP at 1.9067.

Be aware: The above are spot market quotations from the inter-bank market. When your bank does pass on a retail rate they will do so after having subtracted their own discretionary spread. An independent FX provider will guarantee to undercut your bank's offer, thus delivering up to 5% more currency. Find out more here.

16:30: What to look out for tomorrow

• @09:00: Bank of England Deputy Governor Charlie Bean speaks.
• @09:30: Net Borrowing numbers are released by the National Statistics. £10.400B is expected to have been borrowed in September. Last month £11.452B was borrowed.
• @13:30: US Non-farm Payrolls data is finally released. Analysts are forecasting a figure of 180K, up from last month's 169K.

Unemployment Rate (Sep) is tipped to come in at 7.3%.

15:34: Lloyds Bank pick Friday's GDP as their key event this week

Lloyds Bank Research:

"Preliminary Q3 GDP out on Friday will be the key focus for the sterling this week. Our economists are inline with the market consensus forecast of 0.8% q/q growth in Q3; however they view that risks, if any, are to the upside.

"For GBP/USD, we expect to see a test of the recent high of 1.6260 this week. Decent UK data, a firm economic outlook and continued USD selling suggests risks are for a break; however, should we fail to break through this level, risks are for a correction."

15:17: Beware of the US dollar tomorrow

Expect volatility in GBP/USD to pick up tomorrow, Omer Esiner at Commonwealth Foreign Exchange explains:

"The backlog of economic reports that were delayed due to the 16-day government shutdown will begin being released this week, with the all important payrolls data for September on tap for tomorrow morning. Forecast to show an increase of roughly 180,000 new jobs last month, a strong payrolls report could quickly revive hope that the Fed may begin to scale back monetary stimulus in one of its two remaining FOMC meetings in 2013.

"The dollar, which has suffered as a result of the historic political dysfunction in Washington, will continue to struggle if upcoming economic reports fail to boost some optimism about the state of the U.S. economy."

13:54: GBP vs USD looking compact

Matt Weller at GFT on a settled GBP/USD rate:

"The GBP/USD spiked up above 1.6200 on Friday before settling in the upper 1.6100s heading in to the weekend. Now, as we roll into a new trading week, the GBP/USD is also struggling to establish momentum on this groggy Monday. The pair has traced out a compact 28-pip range so far this week, and the recent price action does not suggest an immediate pickup in volatility any time soon."

12:28: Stick with GBP and EUR as opposed to USD (ALSO sell GBP/AUD rallies)

Stephen Gallo at BMO Capital Markets tells us why he prefers holding sterling and the euro:

"For the time being we think it’s worth sticking with the ‘USD alternatives’ theme (EUR and GBP). More specifically though, we are particularly interested in some of the ‘alternatives to the USD alternatives’ (AUD, NZD and NOK). Our tolerance for risk is currently too low to put anything on in size, spot or otherwise, by way of EUR/USD and GBP/USD.

"Therefore, we look to keep selling EUR/AUD on rallies as long as ranges below 1.4200 hold.  Additionally, we are selling GBP/AUD on rallies below 1.6850 and buying NOK/SEK on dips as long as the pair is above 1.0800, until 1.0950 or so comes into view.

"For the latter, we are still long of the 18-month 1.0300 strike puts initiated back in April, but we think the next down leg will take a bit of time to commence.  If anything, this delay would probably be a good thing for the Norges Bank, not a bad one. As of today, our structurally bearish stance towards the NOK remains unchanged."

10:19: ICN Financial Markets say they are backing the Euro against the Pound

"The price continues to hover above the main broken descending resistance following the retreat from 38.2 percent retracement level. The bullish bias remains favored, so long as above 0.8425 support level."

09:53: Where is the Cable's upper limit?

Dukascopy give their key support and resistance levels at the start of a new trading week:

08:35: BoE MPC Minutes ahead, OCBC remain neutral on the GBP/USD

Emmanuel Ng on the outlook for GBP today and later out this week:

"This week, look towards BOE MPC minutes on Wednesday and 3Q GDP numbers on Friday for domestic cues. Over the weekend, the BOE’s Broadbent also noted that the BOE would only consider raising rates if the unemployment rate falls to 7.00%.

"Despite the recent inroads made by the other majors against the greenback, we remain neutral on the GBP-USD within a 1.5940-1.6260 range with the dollar expected to provide further directionality in the coming sessions."

08:27: Outlook for pound sterling according to UBS

Gareth Berry at UBS gives his view on the outlook for sterling vs the Euro and US Dollar:

"With bullish conditions in place, any downside should be limited to support at 1.6059. Resistance is at 1.6260 ahead of the critical 1.6381.

"As long as strong resistance at 0.8500 holds on closing basis potential is for the resumption of downside. Support is at 0.8421 ahead of 0.8333."

08:15: Talk of Bank of England interest rise

A senior Bank of England (BoE) policy maker has, over the weekend, spoken out about the possibility of raising interest rates.

"I think there is a fair amount they could go up before borrowers got into great difficulties," BoE Monetary Policy Committee Member Ben Broadbent said.

"I think there is a fair amount they could go up before borrowers got into great difficulties," said Broadbent.

The British pound sterling (Currency:GBP) has enjoyed a summer of strength on indications that the UK economy is growing again leading to speculation that interest rates will be lifted sooner than the Bank of England is prepared to admit.

08:10: An action filled week ahead for the British pound

• Monday is devoid of any GBP-specific drivers, so we will be focusing on the technical levels that will be dictating to traders.
• On Tuesday at 09:00 MPC member Bean speaks, don't expect too much by way of GBP action.

At 09:30 the ONS releases the Public Sector Net Borrowing (Sep) stats. Forecasts are for £10.400B to have been borrowed.

• Wednesday will most likely be the highlight of the week when this month's MPC minutes are released. Traders will be looking for further comment on forward guidance.
• Thursday is also going to be interesting. At 17:45 Governor Carney speaks; these events are always closely watched and we would certainly expect some sterling volatility.
• Friday brings the next instalment in the quarterly GDP series - analysts are expecting the UK economy to have grown 1.5% Year on Year in the last quarter.

The Quarter on Quarter stats are predicted to come in at 0.8%.