British Pound Sterling Live: GBP faces a busy UK economic calendar; declines vs AUD but up vs EUR and USD

Modified: Tuesday, 09 July 2013 14:42 BST
Written by: Gary Howes

industrial production and GDP
We have some big economic events coming out of the UK today which will give the British pound sterling (Currency:GBP) something to latch onto after a data free Monday. Of importance are the manufacturing numbers at 9:30 and the GDP estimate out at 15:00.

15.15 EUR-GBP Reaches 4 Month High as Pound Continues to Struggle

EUR/GBP has risen half-a-penny to a four-month high following the UK’s industrial and manufacturing data.

Dean Popplewell, chief strategist at Oanda, said of this morning’s developments, "The move has opened the way for the bulls to again contemplate testing the March 12 lows north of 0.8719. For Cable, despite falling a cent so far this morning, bids are located ahead of 1.4850 and 1.4800 option barrier territory. This area also happens to be in proximity of the four-month low last visited ahead of Friday’s NFP release."

14.00 GBP-USD Loses ground on the back of poor UK data

GBP lost the gains it had made yesterday in todays session as poor manufacturing data showed a negative figure at it's lowest for four months despite market expectations of a modest growth.

In the aftermath the Pound Dollar hit 1.4881 during European morning trade, the session low before consolidated at 1.4884, 0.44% lower than yesterday's close. Support may come in for the pair at 1.4856, Monday’s low and a four-month low and resistance at 1.4965, Monday’s high.

The deficit also increased GBP8.49 billion in May, a six month high, from a deficit of GBP8.43 billion in April. Economists had forecast a deficit of GBP8.47 billion.

12.45 GBP-JPY Technical Analysis

GBP/JPY has maintained its medium- term rising trendline so far whilst the hourly resistance at 151.26 (previous support) has been breached. Another resistance can be found at 153.02. An initial support lies at 150.66 (intraday low), while a key short-term support is at 149.26 (26/06/2013 low).

In the longer-term, a further rise towards the strong resistance at 163.09 (07/08/2009) looks likely as long as the key support area between 146.46 (16/04/2013 low) and 145.88 (15/03/2013 high) holds.

12.00 GBP-USD Outlook Remains Negative

ICN capital markets maintained their negative outlook on GBPUSD today stating:

"The upside move yesterday doesn’t change our negative outlook, whereas we are counting on breaking the ascending key support and the negativity of Linear Regression Indicators."

Trading below 1.5030 will be considered negative, but trading below 1.4935 is required to cancel any bullish correction possibility affected by the intraday oversold signals shown on momentum indicators.

The trading range for today is among key support at 1.4710 and key resistance at 1.5090.

The general trend over short term basis is to thedownside as far as areas of 1.5605 remains intact targeting 1.4550.

09.33 Run Of Positive Data Comes To An End As Manufacturing Data Disappoints

The Manufacturing Production released by the National Statistics (which measures the manufacturing output) today showed a month on month loss of 0.8%, significantly lower than the anticipated 0.3% growth

Manufacturing Production is significant as a short term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP.

9.00 GBP Maintained Gains Yesterday Despite Data

GBPUSD maintained its gains yesterday moving higher despite positive US employment data at the end of last week. The pair had reached 1.4939 in the European session before falling back to the 1.4932 mark - still a healthy 0.26% gain on Fridays close.

As we look into a busy day for UK data, GBPUSD will see support at 1.4856 (Friday's low) and a resistance at 1.4956. The increase was in spite of the big losses recorded by the pound last week as the Bank of England indicated interest rates are likely to remain at historic lows for some time. To top this off the dollar was also supported after data showed a much higher than expected figure for their non-farm payrolls.

08.35 BRC Retail Sales Data Gives GBP A Positive Start To The Day

The BRC Retail Sales data was released early this morning and showed positive signs about the state of British retail.

The BRC said the total value of retail sales rose by an annual 2.9 percent in June, slightly slower than the 3.4 percent rise recorded in May but close to the average pace of growth so far this year.

Like-for-like sales, a measure favoured by company analysts which strips out changes in stores' floorspace, grew 1.4 percent last month after a 1.8 percent increase in May.

"This is another respectable performance by UK retailers," said David McCorquodale, head of retail at accountants KPMG, which sponsors the survey.

"Sales are moving in the right direction, albeit hard-earned and promotion driven," he added.

8:22: Latest spot rates show British pound lacks ambition

The pound to euro exchange rate is 0.01 pct higher on last night's close at 1.1621.
The pound to US dollar exchange rate is 0.14 pct higher at 1.4972.
The pound to Australian dollar rate is 0.38 pct lower at 1.6311.

Please note that the above quotes are taken from the spot markets - your bank will affix their own discretionary spread. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more here.

8:15: The economic agenda for the British pound sterling today

A host of economic data releases are due today. Lloyds Bank Research give us their view on today's events.

"Today’s May industrial production release is expected to show a rebound of 0.2% in manufacturing output, following April’s 0.2% fall, reflecting firmer readings from the PMI in recent months. Despite this, we forecast the wider industrial activity measure to have dropped 0.1% on the month. The key contributor is likely to be a circa 2% drop in mining activity. Even allowing for this, industrial output looks set to have posted a strong increase in Q2.

"Trade data for May is also released today. We expect the goods trade deficit to record a fall to £8.1bn, following April’s strong improvement to £8.2bn. This reflected a sharp drop in imports, which improved the EU deficit markedly, and an unusual surplus in non-EU ‘erratics’. We do not expect either factor to persist in May, although signs of an improvement in export performance still point a reduction in the ‘core’ deficit. We also expect services exports to improve a touch. Given this, the total trade deficit is forecast to fall back to £2.2bn from £2.6bn."