British Pound Live On Friday 28th June: GBP Remains Weak On Euro And US Dollar But Strengthens Against The Yen And Aussie Dollar
The euro once again dominates the key new releases as a week in which the pound has continued to struggle against all major currencies comes to an end. Can the pound sterling end the week on a high?
15.47: EURGBP Analysis As EUR Gains 100 Pips Since Wednesday Lows
Having pushed back on Wednesday the GBP has weakened again having lost 100 pips on the Euro since Wednesday. EURGBP has continued it’s move upward and is now nearing last months highs with the next strong resistance at Aprils high of 0.8630. On the downside it would need to break through 0.8470 in which case it may well target the mid-May low of 0.8422 and the 2012-13 support of 0.8401.
With the recent string of positive data from Germany the Euro has seen a gradual rise with Germany a leading economy in the Eurozone.
The EURGBP is currently up 0.25% on yesterdays close at 0.8566
14.07 Pound SterlingAnalysis As It Loses Over 5 Cents Against The US Dollar In The Past 10 Days
GBP has now lost over 5 cents on the pound over the past 10 days as US economic data shows positive signs where the UK have struggled in the recent series of data. The main UK event from this week, the Current Accounts, ruined any chance of a turnaround for the GBP as it showed a deficit rise to -£14.5billion and equally concerning shows a gradual increase since the first quarter of last year.
The pair is not showing a great deal of today’s trading, as the proximate support and resistance lines remain in place (S1 and R1 above). On the downside, there is support at 1.5203, but this is a weak line. This line looked strong at the start of the week, but has weakened badly as the pound continues to sag. There is stronger support at 1.5111. This line has remained intact since mid-March. Looking upwards continued resistance comes at 1.5309 followed by a resistance line at 1.5432, which has strengthened as the pair trades at lower levels.
12.10 Afternoon Spot Rates – GBP Remains Weak on Euro and US Dollar
The afternoon rates show a familiar story as the GBP shows minimal gains on the Japanese Yen and the Australian dollar but continue to lose ground against the Euro and the US Dollar.
GBPUSD is down 0.20% to 1.5229
EURGBP is up 0.43% to 0.8581
GBPAUD is up 0.27% to 1.6495
GBPJPY is up 0.56% to 150.9030
11.48: What Is Wrong With The GBP?
Following news that the UK had not entered into a double dip recession afterall, the GBP still limped along yesterday, possibly due to the fact that we couldn’t have come much closer to it but also because the extent of the recession became clearer – showing that we a return to significant growth levels will be a long and difficult road. Disposable income has fallen at a rate unseen since 1987 from Q1 of 2013 and the GDP is down by approximately 4% compared to the pre-recession as opposed to the expectation of 2.5%.
First quarter data has undoubtedly disappointed and made it clear that the UK economy will take time to recover, a lot more time than had been expected. However, it’s not all doom and gloom. Several recent indicators suggest the second quarter may be a little more positive than the first and with a new head of the Bank of England, Mark Carney, things could be set for a shake-up over the coming weeks.
10.46: String Of Positive Data Shows German Economy Improving, But Does Little For The Euro
Higher than expected retail sales were announced this morning in Germany supporting continued belief that the leading Euopean economy is improving at an increasing rate. The Federal statistics office reported that the sales adjusted for inflation and seasonal swings increased to 0.8% from the previous month where they fell 0.1%. With analysts expecting growth of around 0.4% the report was positive news for Germany and the Eurozone as a whole, which relies heavily on the German economy.
This follows a string of data including the positive unemployment figures and business confidence index for Germany and gives credence to an increasingly positive outlook on the next Consumer Confidence Index.
The EURGBP remained largely unmoved by the latest data but currently lies at 0.8562, up 0.21% on yesterdays close.
10.21 Traders Remain Unsure On The Direction of GBPUSD, But Not of AUDUSD
Oanda the foreign exchange trading platform has indicated that of the trading positions open with them on the GBPUSD the consensus is more uncertain than any other currency pair, with 47.43% holding long positions as opposed to 52.57% who are shorting the pair.
On the opposite end of the scale, a 70.85% majority are holding a long position in the Australian dollar against the US Dollar as opposed to 29.15% who are shorting AUDUSD.
09:24 GBPUSD Moves Away From 1.5200 Level - But Maybe Not For Long
The pound dollar is hovering around yesterdays close having reached highs of 1.5281 in overnight trading with the Nationwide Housing Prices report doing little for either the bulls or the bears. It is expected to be a relatively quiet day for the pair today with no particularly influential data to be released by either side with the possible exception of a couple of speeches from members of the Federal Reserve. The reality is though that this will almost definitely be more of a repetition of previous recent speeches by Fed members suggesting the market’s reaction to Bernankes comments may have been premature and that any rate increases are not in the near future.
The GBPUSD had tested the 1.5200 barrier so an overnight move up to 1.5281 was much needed for the GBP, though technical analysis may suggest this could be short-lived. Commerzbank analysts have indicated that the support of 1.5079 could be in their sights and even lower at 1.5009 (last months low) over the longer term.
09.07: Nationwide House Prices Fail To Meet Expectations, But Still Offer Positive Signs For The Economy
Despite the Nationwide House Prices index showing that prices have increased at the fastest rate in almost 3 years this month, traders remained relatively indifferent about the data. This may be in part down to the fact that other aspects of the data balanced out this positive news. One such aspect was the year on year housing prices growth which whilst up 0.8% on the previous year, came in at 1.9% - below the expected 2.0%.
"Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme," said Nationwide's chief economist Robert Gardner.
08.53: Morning Spot Rates As The GBP Starts The Day Off Slightly Stronger
GBP has started the day slightly stronger than over the past week having increased on the AUD and JPY whilst it hangs around last night closing price of the USD and EUR.
GBPUSD is down 0.03 pct on yesterdays close at 1.5254.
GBPAUD is up 0.25 pct at 1.6494
GBPJPY is up 0.50 pct 150.8140
EURGBP is up 0.05 pct at 0.8548
NB: The above are wholesale market quotes; your bank will affix its own discretionary spread when passing on your retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.
07.20: Big News Releases From Germany Dominate The Days Releases
07.00 (Germany) The morning kicks off with the German retail sales, an important measure of the growth (or lack of) in the retail sector. This is expected at 0.6% year on year following the previous year’s 1.8%. Month on month May is expected to be up 0.2% following on from Aprils which was -0.4%.
07.00 (UK) At the same time the UK releases data on the Nationwide Housing Prices in terms of percentage growth year on year and month on month. Year on year growth is expected at 2.0% up 0.9% on the previous year whilst month on month it is expected at 0.3% down slightly on the previous month which came in at 0.4%. Month on month data is unlikely to have any significant impact but any high results on the year on year data could have a positive impact on the GBP and vice versa.
13.00 (Germany) Important data for Germany comes in the form of the annual consumer price index which measures the average change in the price of all goods and services. This is a key indicator of inflation and unexpected changes could have significant impact on the Euro with Germany the leading economy. It is expected to increase by 0.2% from last year up to 1.7%. At the same time the Harmonised Index of Consumer Prices from Germany is also released, another potential important influencer of the Euro, The HICP is an index of consumper prices.
13.00 (US) Not expected to have much of an impact on the USD, FOMC member Jeremey Stein is set to give a speech.