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.

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
Mixed
Oil - US Crude
Mixed
Wall Street
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
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • The market’s preferred ‘fear indicator’ shows a persistent uncertainty around the near future. What can our current conditions and history tell us what to expect from the #VIX through the final two months of the year?https://t.co/jlhcFhH4sI https://t.co/zIrEjxqymJ
  • #Stock market performance is considered an important predictor of the economic outlook. What else can it be used to project? https://t.co/ViTMl19TW3 #Elections2020 https://t.co/methLCaBho
  • What are some monetary policies that could affect Gold this quarter? Get your Gold free forecast here: https://t.co/b9XwwYS9uJ https://t.co/8OIZVJnaD6
  • A #Euro reversal off technical downtrend resistance now risks a larger correction in price. Here are the levels that matter on the $EURUSD weekly chart. Get your #currencies update from @MBForex here: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2020/10/31/Euro-Technical-Outlook-EURUSD-Breakdown-Aims-For-Multi-month-Lows.html?QPID=30472&CHID=9 https://t.co/iVhmCXi9EG
  • We are days away from the US Presidential election and the markets are caught in the vortex. A contested outcome would raise serious volatility for the markets whereas a decisive outcome seems to support bullish $SPX and Dollar views from the market rank. https://www.dailyfx.com/forex/video/daily_news_report/2020/10/31/SP-500-and-Dollar-Forecast-Leads-Global-Markets-with-Elections-Expectations-.html https://t.co/JnJbyu6TRT
  • The future implications of the #Elections2020 may influence $AUDUSD following the #RBA and #Fed rate decisions as Congress struggles to pass another round of fiscal stimulus. Get your #currencies update from @DavidJSong here: https://t.co/soPu0Wefz2 https://t.co/UWsERr2AYh
  • Gold prices declined in the aftermath of bearish technical cues, but a key zone of support was reinforced. $XAUUSD volatility risk is elevated ahead of the #Elections2020. Get your #metals update from @ddubrovskyFX here: https://t.co/gWOxdqk8OL https://t.co/gBMgF0YNjH
  • USD awakens, placing GBP/USD on the backfoot, while EUR/GBP cracks 0.90. Get your #currencies update from @JMcQueenFX here: https://t.co/fndMQJLul8 https://t.co/elz5gNAKrB
  • What are some factors impacting Euro’s forecast this quarter? Get your free forecast here: https://t.co/kpBYVz31Bd https://t.co/7EzMPg9Kqg
  • Emotions are often a key driving force behind #FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:https://t.co/eILWbFgHRE https://t.co/DjMdgL5x19
Mixed Bag of UK Data with a Weak US Dollar Drives GBP/USD Higher

Mixed Bag of UK Data with a Weak US Dollar Drives GBP/USD Higher

2015-10-16 21:33:00
James Stanley ,
Share:
Mixed Bag of UK Data with a Weak US Dollar Drives GBP/USD HigherMixed Bag of UK Data with a Weak US Dollar Drives GBP/USD Higher

Fundamental Forecast for British Pound:Neutral

Last week the Bank of England struck a cautious tone as global growth concerns raised enough red flags for the Monetary Policy Committee to vote 8-1 in favor of keeping rates flat at .5%. Governor of the BoE, Mr. Mark Carney, noted last week that the global economy is a ‘pretty unforgiving environment,’ alluding to the economic slowdown currently permeating throughout Asia and the recent gutting of commodity prices. This had helped to diminish hopes for a rate hike, and we saw the Sterling lose ground against most major currencies excluding the US Dollar (GBP/USD) and the Japanese Yen (GBP/JPY) (which themselves were seeing considerable weakness on the back of global growth concerns).

We saw even more evidence of this slowdown to global growth on Tuesday when inflation for the UK fell into negative territory: Year-over-year CPI for the month of September printed at -.1%, with Core CPI (excluding food and gas) at 1% versus an expectation of 1.1%. Upon this print, the Sterling was offered aggressively against most major currencies, including the dollar and the yen, as those hopes for an earlier-than-expected rate hike diminished even further. In GBP/USD specifically, an outsized reaction was seen off of a confluent resistance level as the pair made a move lower towards multi-month support lows.

But only a day later, all of those losses were erased and then some. A positive employment report out of the UK re-energized hopes for an eventual rate hike, and GBP/USD ripped to new near-term highs after unemployment printed at the lowest level since 2008 at 5.4%. Inside of the report, wage growth came in at 2.8%, which given the deflationary print from the day prior, means that real-UK wage growth is at its highest since any time since the Financial Crisis. This helped to catapult GBP/USD higher as a weak US Dollar continued to see rate-hike-bets get priced out of the market.

And earlier on Friday, we heard again from BoE member Ms. Kristin Forbes as she said that the UK would likely look to hike rates ‘sooner rather than later.’ This is the second time in the past two months that she’s used this phrase, and given the context with which it was delivered, could prove to offer insight into future MPC-policy direction. Ms. Forbes said that while the UK wasn’t likely to be completely immune to a Chinese and Emerging Market slowdown, the British economy’s export exposure was the third lowest of all major advanced nations.

The continued uncertainty around rate trajectory, combined with the mixed bag of data that was seen this week, continues to obscure the near-term picture in the British Pound. For now, the forecast remains neutral. But should inflation begin to show more prominently in the coming months, that forecast can quickly change to bullish, as the Bank of England remains one of the few Central Banks in the free world actually looking at tightening monetary policy. The expectation still remains for a 2017 rate hike, but should inflationary pressures begin showing, that expectation could certainly be moved up, and the British Pound will likely move along with it.

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

DISCLOSURES