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
More View more
Real Time News
  • EUR/USD attempts to halt a five day decline as the Federal Reserve sticks to the sidelines. Get your market update from @DavidJSong here:https://t.co/ig9bGLj35i https://t.co/YPksmNdJLR
  • US Markit Composite PMI for September fell to 54.5 from 55.4, whereby the services and manufacturing figures fell to 54.4 and 60.5 respectively, both missing analyst estimates. Get your market update from @JMcQueenFX here:https://t.co/4lFZGRufsM https://t.co/DuPcQtaBz0
  • S&P 500, Nasdaq Rally After the Fed; 10 Year Yield to Two-Month-Highs https://www.dailyfx.com/forex/market_alert/2021/09/23/SPX-SPY-ES-SP500-Nasdaq-NQ-QQQ-Rally-After-the-Fed-10-Year-Yield-2-Month-High.html https://t.co/peftVleO0y
  • #Bitcoin Outlook: $BTCUSD Bounce From 40K, Fake-out or Shake-out? - https://t.co/ixsRMKgCom https://t.co/KDQv4wgfot
  • While JPY gets clobbered, CHF decides to turn a blind eye to yields $CHF https://t.co/MViWZiiPZ7
  • The surprise 100 basis point cut from the Turkish central bank (to 18%) generated the expected pressure for $USDTRY. That said, I don't think it was the market that decided the momentum should die out at 8.8000 again... https://t.co/4jmOPnzzK9
  • surprised that $NQ is holding up so well with what rates are doing. 10 year yield at a 2 month high, $Nasdaq still holding resistance at prior support https://t.co/UBWBxY2nFC
  • The S&P 500 has recovered all the ground it lost at the start of the week and the Dollar has slumped post FOMC and PMIs. DailyFX's @JohnKicklighter gives a brief overview of the market for Thursday! https://t.co/jihKB44ELn
  • https://t.co/lbNvVbQq4n
  • The future taper isn't enough to urge the Dollar to a critical bullish break. In turn, $EURUSD has reversed shy of of August's trough and keeps in play an inverse head-and-shoulders pattern with a neckline at 1.19 https://t.co/EgUtX6Pmvy
British Pound Looking Stronger As Trade Data Beat Expectations

British Pound Looking Stronger As Trade Data Beat Expectations

Martin Essex, MSTA, Analyst

Talking Points

- GBPUSD is rallying after its falls over the past week.

- UK trade data for October came in much better than many analysts were expecting.

- However, political rather than economic factors continue to dominate trading.

GBPUSD is firmer Friday, recouping some of its losses over the past week, after news of a smaller than expected UK trade deficit. However, the optimism was tempered by news of big upward revisions to previous months following an error by the Office for National Statistics in how trade in gold was recorded.

The figures showed the trade deficit in October narrowing to £1.971 billion from £5.812 billion in September – an upward revision from the previously announced £5.2 billion.The deficit in goods alone narrowed to £9.711 billion in October from September’s upwardly revised £13.832 billion – a much bigger improvement than the £11.8 billion deficit economists had forecast.

By contrast, construction output fell slightly on the month and in the three months to October continued its downward trend. Output in the sector dropped by 0.6% in October compared with growth of 0.9% in September and economists’ forecasts of a modest 0.2% rise.

Meanwhile, the Bank of England/TNS Quarterly Survey showed a jump in the public’s near-term inflation expectations but the Bank’s rate-setting Monetary Policy Committee is likely to be please by news of only a limited rise in long-term expectations and by a forecast that inflation is actually expected to be lower in two years, at 2.5%, than in a year, at 2.8%.

Taken together, the numbers helped extend an earlier rally in GBPUSD.

Chart 1: GBPUSD 5-minute Chart (December 9, 2016 Intraday)

British Pound Looking Stronger As Trade Data Beat Expectations

The improvement in the UK trade data likely reflect the weakness of the British Pound in the aftermath of the Brexit decision to leave the European Union. However, there’s little doubt that the main drivers of the currency at present are the tortuous negotiations to bring the Brexit referendum result into practice.

Also, for now at least, the main driver of GBPUSD will be the US side of the equation, with the Federal Open Market Committee expected to raise US interest rates next week and perhaps drop some hints about further increases in the New Year. While higher US rates remain in prospect, the market’s bias to buy the Dollar looks set to remain intact.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

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

DISCLOSURES