News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHHGbZ https://t.co/nAoZXAZFuD
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX! https://t.co/lxd5fZnn4H
  • Bitcoin ended a 10 consecutive day advance with yesterday's bearish close - breaking pace only after it overtook the 100-day moving average. That 10-day climb matches the longest bull charge with only two other examples. $BTCUSD https://t.co/G5UdX96mn9
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/9t94CbyQEi
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/LB749nN0K4
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/7JZu61F0OW
  • Tech stocks pulled back from record territory after Amazon posted tepid Q3 guidance. Get your weekly equities forecast from @margaretyjy here: https://t.co/kpYlD2ryue https://t.co/pXDztqY8PQ
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/LQS1xMPSVc
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/WmRkOUGwlq
  • Recent price action in the US Dollar Index (DXY) casts a bearish outlook for the Greenback as it extends the series of lower highs and lows from earlier this week. Get your weekly USD technical forecast from @DavidJSong here: https://t.co/aQVzoACWEp https://t.co/TBFiTrur0P
Forex: Euro Getting Overbought- Pound To Benefit From BoE Minutes

Forex: Euro Getting Overbought- Pound To Benefit From BoE Minutes

David Song, Strategist

Talking Points

  • Euro: Spain Sells EUR 3.52B In Debt, Bad Loans Hit Record High
  • British Pound: U.K. Inflation Holds At 2.7%, BoE Minutes In Focus
  • U.S. Dollar: Holds Tight Rate Amid Light Calendar, Fed’s Fisher On Tap

Euro: Spain Sells EUR 3.52B In Debt, Bad Loans Hit Record High

The Euro rallied to a fresh monthly high of 1.3188 as Spain sold EUR 3.52B in short-term debt, with the six-months bills yielding 1.6309% versus the 1.669% offered last month, but the ongoing threat for contagion may produce further headwinds for the single currency as the periphery countries struggle to get their house in order.

Indeed, EU Economic and Monetary Affairs Commissioner Olli Rehnencouraged Spain to take additional steps in reducing its budget deficit as the risk of fiscal stress ‘remains rather elevated,’ while a separate report showed the ratio of bad loans to overall lending in Spain increased to a record 11.23% in October as the region struggles to emerge from the recession.

As the economic downturn in the euro-area dampens the outlook for price stability, there’s speculation that the European Central Bank (ECB) will continue to target the benchmark interest rate in 2013, but we may see the Governing Council stick to the sidelines at the January 10 meeting as policy makers see the economy returning to growth in the second-half of the following year.

ECB board member Yves Mersch said rate cut expectations may be overstated as the Governing Council now primarily relies on its non-standard measures to address the risks surrounding the region, but we may see a growing number of central bank officials look to target the benchmark interest rate as the headline reading for inflation is expected to fall below the 2% target in 2013.

Although the EURUSD looks poised to make a run at the 1.3200 figure, we’re seeing the relative strength index come up against overbought territory, and the pair may face a short-term correction over the next 24-hours of trading should the oscillator fail to push above the 70 region.

British Pound: U.K. Inflation Holds At 2.7%, BoE Minutes In Focus

The British Pound continued to pare the decline from September, with the GBPUSD climbing to a fresh monthly high of 1.6225, and the sterling looks poised to make a run at the 1.6300 figure as we anticipate the Bank of England (BoE) to soften its dovish tone for monetary policy.

Indeed, consumer prices in the U.K. increased another 2.7% in November to mark the fastest pace of growth since May, and sticky price growth may prompt the Monetary Policy Committee to shift gears in 2013 as the central bank expects inflation to hold above the 2% target over the next two-years. In turn, we should see the BoE Minutes talk down speculation for additional monetary support, and the central bank may sound more hawkish this time around as the U.K. emerges from the double-dip recession.

Although we’re seeing the relative strength index on the GBPUSD approach overbought territory, we will look for further advances in the exchange rate as the oscillator maintains the upward trend carried over from the previous month, and the sterling remains poised to outperform throughout the remainder of the year amid the shift in the policy outlook.

U.S. Dollar: Holds Tight Rate Amid Light Calendar, Fed’s Fisher On Tap

The greenback continued to consolidate on Tuesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) holding within the previous day’s range, and the reserve currency may continue to track sideways going into the middle of the week as the economic docket remains fairly light over the next 24-hours of trading.

Nevertheless, we do have Dallas Fed President Richard Fisher scheduled to speak later today, and we should see the central bank hawk talk down bets for additional monetary support as the economy gets on a more sustainable path. As the economic recovery becomes more broad-based, we should see the FOMC stick to the sidelines in 2013, and a growing number of central bank officials may strike a more neutral tone for monetary policy as growth and inflation picks up.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

15:00

10:00

NAHB Housing Market Index (DEC)

47.0

46.0

USD

18:15

13:15

Fed's Richard Fisher Speaks on U.S. Economy

NZD

21:45

16:45

Current Account Balance (3Q)

-4.400B

-1.797B

NZD

21:45

16:45

Current Account Deficit-GDP Ratio (3Q)

-4.8%

-4.9%

AUD

23:30

18:30

Westpac Leading Index (MoM) (OCT)

0.7%

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES