The British Pound Live on THURSDAY: GBP powers ahead versus the majority of major currencies
- Written by: Will Peters
-
The pound faces little by way of domestic data today thus we are left watching moves in the US dollar and the technical charts today.
17:17: Friday = no GBP-specific news
No major economic releases due on Friday; based on today's positive momentum we would expect sterling to remain well supported in this technically driven environment.
17:13: Sterling powers higher
A great end to the London session for sterling:
- The pound euro exchange rate is 0.24 pct higher at 1.1596.
- The pound to US dollar exchange rate is 0.71 pct higher at 1.5123.
- The pound to Australian dollar is 1.07 pct higher at 1.6550.
- The pound to New Zealand dollar is 1.33 pct higher at 1.9422.
Please be aware that the above quotes are from the spot market. Your bank will affix their own discretionary spread to the figures. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.
16:20: Sterling advances against Australian dollar, more to come?
Sterling is over a percent higher than the Australian dollar this afternoon.
16:02: Sterling tipped for retreat back to 1.5 vs US dollar
The surge in GBP-USD is stalling, the question now is how far the stall will take the exchange rate.
Matthew Weller at GFT says 1.5 is a handy target:
"The GBP/USD also rallied following Bernanke’s comments yesterday, though the bounce was limited compared to the pound’s European cousin. A recent Bearish Engulfing Candle suggests that a retracement is already in progess, with potential for a move down toward the 1.5000 round handle later today.
"On the other hand, a break back above 1.5200 would suggest more strength to come, opening the door for a run up toward 1.5300 next."
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15:21: More technical guidance on EUR-GBP
Trading Central are backing gains in the euro against the pound with their latest technical guidance:
"Long positions above 0.8615 with targets @ 0.869 & 0.8725 in extension."
14:20: Can the euro pound exchange rate continue bullish momentum?
Yesterday saw further gains by the EUR-GBP, but today the pound is on the front-foot. Nevertheless, analysts are backing the euro.
We hear from ICN Capital Markets who also back the euro saying:
"The EURGBP rebounded yesterday, following the sharp bearish shooting star candle, as shown on chart. However, we prefer to see a daily closing above the high of the shooting star candle at 0.8667 to confirm further upside and the continuation of the bullish move. Anyway, we will expect a bullish move today, but with a tight stop."
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13:55: US dollar advances on disappointing weekly employment data
Perhaps the biggest event on the global economic calendar has boosted the US dollar.
According to the Labour Department, the Americans that filed in their first initial claims for regular state unemployment-insurance benefits rose by 16K last week to a seasonally adjusted 360K in the week ended July 6, missing expectations at 340K and coming from 344K (revised) in the previous print.
GBP/USD has retreated but is still half a percent higher at 1.5097.
11:51: Sterling lost 0.1 pct of its value
Mark Deans at Moneycorp:
"Nearly two thirds of major currencies were arguably overpaid relative to sterling yesterday. Against a raw average of ten currencies the pound lost -0.1% of its value. That apparently tiny change obscures some fairly big moves. The US dollar weakened by nearly three cents against the pound (-1.9%) while the Swiss franc strengthened by two (+1.3%).
"For the purposes of our rough-and-ready calculation, if the pound falls by -0.5% against the USD, -0.9% against the EUR and -1.0% against the CHF its raw average will be down by -0.8%. Ten of the world's most actively traded freely-floating currencies are used in the calculation; the USD, EUR, CHF, JPY, CAD, AUD, NZD, SEK, NOK and ZAR."
11:42: Insights into AUD and USD weakness vs the GBP
Some insights just published:
Why the Australian dollar is under pressure
Why the US dollar is under pressure
10:40: Where is the next resistance for GBP vs USD?
The pound remains on the front foot against the US dollar. Where next though?
Luc Luyet at MIG Bank says the surge in GBP-USD could be capped by resistance:
"GBP/USD has surged higher near the support at 1.4832. The key resistance at 1.5130 (see also the declining trendline) has been breached.
Resistances are now at 1.5194 and 1.5305. Hourly support can be found at 1.5049 (38.2% retracement of the current bounce) and 1.4981 (previous resistance)."
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8:55: GBP rates
The British pound sterling (Currency:GBP) is only really having any success against the US dollar today:
- The pound to euro exchange rate is unchanged on last night's close, GBP-EUR is at 1.1566.
- The pound to US dollar exchange rate is 0.4 pct higher at 1.5074.
- The pound to Australian dollar rate is 0.23 pct in the red at 1.6335.
- The pound to New Zealand dollar is 0.4 pct lower at 1.9092.
Please note that the above quotes are from the spot market. Your bank will affix their own discretionary spread to the figures. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.
8:45: US dollar proving to be a nightmare
This morning London markets are factoring in last night's Bernanke and FOMC event. The US dollar is of course in focus.
Jeremy Cook at WorldFirst says:
"To say the USD is unpredictable is disingenuous; it’s proving to be a bit of a nightmare. I would say to those who are cable buyers (sell GBP in order to buy USD) that these spikes can evaporate in short order, especially if we receive another data surprise akin to Tuesday’s manufacturing sector disappointment."
8:40: US dollar pulls back
The story overnight is that the US dollar has retreated. We warned that US dollar gains were overextended at 16:50 yesterday.
Nevertheless, the trigger was the FOMC. Kathy Lien at BK Asset Management says:
"The U.S. dollar received very little support from the FOMC minutes or Bernanke's testimony. Interestingly enough, this was not because the central bank did not talk about tapering, quite the contrary the minutes revealed a healthy discussion on the topic. Instead, the problem was that there was quite a bit of divergence in views at the last meeting.
"While Bernanke said the central bank could begin tapering in 2013 and end asset purchases in 2014, the notes from the discussion showed more inconsistency."