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.

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
EUR/USD
Bearish
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
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bearish
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
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.08%, while traders in US 500 are at opposite extremes with 71.40%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Asn1swWh7q
  • Heads Up:🇲🇽 Industrial Production YoY (MAY) due at 11:00 GMT (15min) Expected: -24.3% Previous: -29.3% https://www.dailyfx.com/economic-calendar#2020-07-10
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Silver: 0.29% Gold: 0.15% Oil - US Crude: -2.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4BnbUobwrJ
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.42% 🇪🇺EUR: 0.09% 🇳🇿NZD: 0.08% 🇦🇺AUD: -0.04% 🇨🇭CHF: -0.10% 🇨🇦CAD: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/wFigkggpWQ
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/Y79noqMYjd
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.32% Germany 30: 0.22% France 40: 0.10% US 500: -0.48% Wall Street: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/QApJ84oHnR
  • Yesterday, USD/CHF declined to a near three- months low. Will today’s US PPI numbers at (13:30UK) boost the US dollar price? #USDCHF, #USeconomy, #USD https://t.co/iMm8NARYxe
  • UK 8-year Gilts on the cusp of turning negative..#gilts #sterling @DailyFXTeam https://t.co/ldXS2eYzJl
  • 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/8rwkKVigC4
  • South Africa's Eskom says the possibility that Eskom may be forced to implement loadshedding has increased as the power system is severely constrained $ZAR
British Pound Vulnerable to Debt Crisis, Dilution After More QE

British Pound Vulnerable to Debt Crisis, Dilution After More QE

2012-02-19 23:04:00
Christopher Vecchio, CFA, Senior Strategist
Share:
British_Pound_Vulnerable_to_Debt_Crisis_Dilution_After_More_QE_body_Picture_5.png, British Pound Vulnerable to Debt Crisis, Dilution After More QEBritish_Pound_Vulnerable_to_Debt_Crisis_Dilution_After_More_QE_body_Picture_6.png, British Pound Vulnerable to Debt Crisis, Dilution After More QE

Fundamental Forecast for British Pound: Bearish

Considering the deteriorating fundamental backdrop for the British Pound, its performance this past week was admirable: while the highly correlated EURUSD fell by 0.38 percent, the GBPUSD rallied by 0.52 percent. In an environment that has become increasingly hostile to the European currencies while equally if not more generous to the commodity currencies, the Sterling’s performance this week is nothing to shake a stick at. Still, keeping the bigger picture in mind, the British Pound has severely underperformed the commodity currency complex, falling by 5.30 percent, 3.00 percent, and 0.64 percent against the New Zealand, Australian, and Canadian Dollars, respectively.

Data the past week was better than expected for the United Kingdom, with the Bank of England noting that price pressures were falling with “less risk” of inflation undershooting the 2 percent target; in this case, the Bank of England has become less dovish, despite the fact that the Monetary Policy Committee recently expanded its asset purchase program to £325 billion. Elsewhere, retail sales in January surprised to the upside significantly, coming in at 2.0 percent year-over-year against a forecast of 0.5 percent. Between the developments, the British Pound was easily supported headed into the second half of the week.

In terms of market moving data this week, only one piece of data sticks out over the coming days, and that comes in the form of the Bank of England minutes due on Wednesday. Beyond the central bank’s inflation outlook and their decision to increase its asset purchase program, it is likely that the policymakers will outline future monetary policy prospects. To this end, given recent rhetoric from officials, and more importantly from Governor Mervyn King, it is likely that the Bank of England’s exceptionally dovish policy stance is winding down.

This outlook comes at a particularly interesting time given the deteriorating interest rate environment across the globe, with the brunt of the fundamental risks originating in Europe. With that said, at the end of the day, the British Pound is likely to track the performance of the Euro, given the parallels of the debt situation in the United Kingdom and the debt situation in the Euro-zone periphery nations (this comes after the United Kingdom’s AAA-rating was put on alert this week). With the Greek tragedy coming to a crescendo, the outcome of the bond swaps will most likely dictate the Sterling’s performance over the coming week. – CV

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

DISCLOSURES

News & Analysis at your fingertips.