British Pound (GBP) LIVE: Sterling Consolidates, GBP/AUD 1 pct Higher, Outlook is Soft

British pound to euro exchange rate (GBP to EUR): 0.17 pct lower at 1.2012.

British pound to US dollar exchange rate (GBP/USD): 0.14 pct lower at 1.6348.

British pound to New Zealand dollar (GBP/NZD): 0.1 pct higher at 1.9662.

British pound to Australian dollar (GBP/AUD): 1.14 pct higher at 1.8571 .

British pound to Canadian dollar (GBP/CAD): 0.05 pct lower at 1.7897.

British pound to South African Rand (GBP/ZAR): 0.4 pct higher at 17.8905.

BE AWARE: All the above quotes are taken from the wholesale inter-bank markets. Your bank will affix a spread to the rate at their discretion when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.

The Bank of England announces today that the £50 banknote carrying the portrait of Sir John Houblon, the first Governor of the Bank of England, will be withdrawn from circulation on 30 April. From that time, only the £50 note featuring Matthew Boulton and James Watt, which was introduced in November 2011, will hold legal tender status.

Members of the public who have Houblon £50 notes can continue to use them up to and including 30 April.

After 30 April, general retailers are unlikely to accept the Houblon notes as payment. However, most banks and building societies will continue to accept them for deposit to customer accounts. Agreeing to exchange the notes after 30 April is at the discretion of individual institutions. Barclays, NatWest, RBS, Ulster Bank and the Post Office have all agreed to exchange Houblon £50 notes for members of the public - up to the value of £200 - until 30 October 2014.

The Bank of England will continue to exchange Houblon £50 notes after 30 April, as it would for any other Bank of England note which no longer has legal tender status.

For those with an eye on the euro dollar exchange rate we have just published the latest forecasts from Danske Bank. Those watching the euro/pound rate should take note as this headline rate will continue to partly determine direction in EUR/GBP in 2014.

MIG Bank give the following guidance for those watching the EUR/GBP exchange rate:

"EUR/GBP is bouncing after its recent low at 0.8231. Monitor the resistance at 0.8350, as a break would call for a second leg higher towards the key resistance at 0.8405 (see also the declining trendline). An hourly support stands at 0.8285 (13/01/2014 low).

"In the longer term, despite the successful test thus far of the support at 0.8523, the underlying bearish trend remains negative. We favour further gradual weakness towards 0.8160 (61.8% retracement of the 2012-2013 rise)."

Camilla Sutton at Scotiabank is bearish on GBP for the short-term:

"GBP is weak, down 0.2% and flirting with a break below its 50‐day MA at 1.6317. Data and news flow was relatively light; with RICS house price balance at 56%. Tomorrow’s retail sales are important but it is next week’s employment and BoE minutes that will provide clearer direction for GBP traders.

"GBPUSD short‐term technicals: bearish—all technical studies are in sell territory and there are no warnings on the chart—a break below the 50‐day MA of 1.6317 would accelerate selling. For short‐term traders, we favour GBP short positions."

Luc Luyet at MIG Bank joins a host of analysts fretting over whether Cable is about to see support broken; the implication being that we will then witness further selling pressures:

"GBP/USD is challenging its support area between 1.6338 and 1.6305. The recent succession of lower highs favours a short-term bearish bias. An initial resistance lies at 1.6379 (intraday high). Another resistance can be found at 1.6464 (14/01/2014 high, see also the declining channel).

"The break of the major resistance area between 1.6381 and 1.6466 favours a further long-term rise towards the strong resistance at 1.7043 (05/08/2009 high). However, a break of the support at 1.6220 would negate this positive outlook. Another key resistance lies at 1.6747 (28/04/2011 high)."

This is not a good day for sterling. There are a couple of bright spots however with GBP/AUD and GBP/TRY higher. Concerning the Turkish Lira, Swissquote Bank say:

"The Turkish lira started the day aggressively sold-off as a renewed upside attempt in USDTRY triggered a heavy amount of stops above 2.1950/60 this time. USDTRY hit the all-time high of 2.2124, EURTRY traded to 3.0128 (at the time of writing).

"The sell-off is nothing but a continuation of the on-going bribery scandal and some groups accusing the AKP government of couple of hundreds of billions worth side gains on several contracts in the construction industry, parallel trading, other lucrative business and the presumed barriers to judiciary action by the ruling AKP government to prevent arrests (including the son the Prime Minister – which makes the issue even bigger than what it might seem) and so. The political reasons are clearly not the main subject of this report, yet the heavy impact on the Turkish lira is of great interest."

ICN Financial note:

"Several attempts to the downside and to break the key support of the ascending channel, and till now the pair is attempting to confirm breaking this support. We will wait to break 1.6310 to support the negative outlook and cancel positivity referred to yesterday.

"By examining the technical indicators, we notice clear negativity on Linear Regression Indicators, as RSI is trading in a downside move below line 50."

An update from GBP-bulls Nomura:

"We expect BoE hikes by August, and this is still not fully priced. The key variable is the unemployment rate, which is expected to hit the 7% threshold in Q1 and firmly breach by Q2.

"There are strong inflows into UK equity, overwhelming the negative impact from outflows."

"Cable fell yesterday with Middle East sellers being heard behind the drop; a rise in the US CPI is likely to further weigh on GBP in the short term but a break of 1.63 is needed for a bearish signal." - Italy's UniCredit Bank.

Sean Lee appears to be one currency trader caught short by the aggressive sell-off in the Australian dollar:

"The macro speculative market is piling into AUD/USD shorts, with .8500 seen now as a foregone conclusion and some starting to talk now of levels below .80 cents.

"Initial resistance is at previous lows of .8820/25 and a break above there will run into further headwinds near the .8870 breakdown level from earlier today.

"Sorry, I’m of no help to anyone in this move and I’m getting it wrong more often than I’m getting it right."

Lloyds Bank Research tell us the outlook for the British pound (GBP) is likely to be dominated by sentiment towards the US dollar:

"GBP/USD eased lower on a firmer USD yesterday, and with nothing on the domestic calendar today, it looks likely to remain driven by USD sentiment. The 1.6310 should provide decent initial retracement level support; the 50 day moving average comes in just above there.

"EUR/GBP should remain well supported today. UK retail sales data released tomorrow will be a focus, though our economists highlight risks are to the low side of market expectations, however, weaker CPI print released earlier this week poses upside support to sales.

Why is the AUD under the hammer today?

Today’s labour force report was weaker than expected, with the detail and underlying trends soft.

Employment declined by 22.6K, more than retracing the 15.4K increase in November (revised down from +21.0K). This was driven by full-time employment (-31.6K) which remains negative in trend terms.

The unemployment rate was 5.8%, although did tick up in unrounded terms by 0.1ppt to 5.85% from 5.77% in November. The unemployment rate is now just below the 5.87% peak in June 2009.

"Sellers still trying to break the heavy bank of bids sitting in front of EUR/USD, though as is well versed, demand from Asia is pretty substantial, exacerbated by ever increasing export and reserve USD growth in the region. 1.3604 is as low as we have managed to get and we would expect option accounts will have some buying interest here also given today's sizeable expiries around the figure level. EUR/GBP is sticking close to 0.8300 for similar reasons, with a notable expiry here also, though we have been hearing of some real money demand for GBP today. EUR/JPY is back under 1.4200, weighed by both component spot rate losses recently." - FX Market Alerts.