Expect EUR/GBP Losses; MPC's Treasury Select Appearance GBP-Neutral: Thursday's Live Coverage
A busy day ahead for currency markets with the British Pound Sterling (Currency:GBP) being tested at 10:00 AM when the Bank's MPC members appear before parliament. Technical forecasters do however predict further Pound Sterling Strength courtesy of the positive price action we have been witnessing. Follow us for all the latest forecasts, views and coverage of today's GBP trading session.
These are Your Latest Spot Market Rates as of the Time of the Last Update:
- The Pound to Euro exchange rate is 0.02 pct lower on a day-to-day basis; GBP/EUR is now at 1.1881.
- The Pound to US Dollar exchange rate is 0.02 pct lower at 1.5814.
- The Pound to Australian Dollar exchange rate is 0.6 pct higher at 1.7065.
- The Pound to New Zealand Dollar exchange rate is 0.82 pct lower at 1.9537.
Please Note: The above are spot market quotes; your bank will affix a discretionary spread to the figures when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.
18:00: Friday's Agenda
We are seeing a softening in GBP as we head into the final hours of Thursday trade.
With a lack of economic data coming out of the UK tomorrow we would expect this gradual softening to continue.
Tomorrow we will focus on the latest technical and fundamental forecasts to ascertain likely future direction.
15:09: GBP in significant breakout vs US Dollar
Matt Weller at GFT is certainly bullish on the Pound's chances against the US Dollar going forward:
"The GBP/USD also spiked higher yesterday, but lost momentum above the 1.5800 level in today’s Asian session trade. Nonetheless, the daily close above the long-term 1.5750-70 resistance band represents a significant breakout, so the longer-term bias has now shifted to the topside.
"Meanwhile, we anticipated support to emerge in the previous resistance zone around 1.5750-70 if we see any dips later today, potentially providing an opportunity to enter into the longer-term uptrend at a more favourable rate."
14:52: Expect EUR/GBP Losses
Kathy Lien continues with her theme of a weaker Euro which will apparently see the British Pound in particular benefit:
"The euro is under pressure because of more signs of weakness in the Eurozone economy. Eurozone industrial production dropped 5 times more than expected in the month of July, raising fresh concerns about the region's underperformance.
"We believe that the outlook can worsen, putting additional pressure on the currency and potentially driving the EUR/USD below 1.31. However the more consistent and potentially more significant losses will probably be seen in the euro crosses such as EUR/GBP and EUR/NZD."
14:46: US Dollar Strength a Key Theme in Afternoon Trade
The U.S. dollar is trading higher against most of the major currencies, but the USD could be so much more higher says one analyst.
Kathy Lien at BK Asset Management says some encouraging US data has benefited the US currency:
"Jobless claims dropped to 292k from 323k, its lowest level in 7 years. For the first time since March 2006, fewer than 300k people filed for jobless claims benefits, which should have been extremely positive for dollar but unfortunately elicited only a small reaction in the greenback.
"The problem is the data is abnormally low because the Bureau of Labor Statistics said 2 states upgraded their computer networks and some filings were not reported.
"In other words, we should take the numbers with a grain of salt."
11:45: Sterling stable
The appearance before the Treasury Select Committee by members of the MPC is ongoing with more technical issues being discussed.
Still no surprises, the Pound Sterling is trading in stable fashion.
10:07-11:45: MPC in Front of Parliament
Points so far from MPC testimony in front of Parliament's Treasury Select Committee:
10:52: Meanwhile, UK Gilts Flogged for 2.976% - highest since June 2011.
10:49: "GBP used to fall everytime Mervyn King opened his mouth; it seems to have the opposite relationship with Dr Carney" - WorldFirst FX Brokers.
10:39: MPC will not fiddle with policy. Will not be swayed.
10:35: Sterling back to levels seen yesterday, it appears markets took the currency lower ahead of today's Treasury Select appearance in case of any shocks.
10:23: Watch it Live here.
10:17: Sterling advances against US Dollar, markets just don't believe the MPC on rates 'lower for longer'
10:14: Carney - employment at 7% is not guaranteed trigger to rate rise. If knockouts are breached then MPC will make a decision. Employment is NOT a 'target'
13 minutes in, Sterling is steady.
10:13: Carney - We have not ditched inflation target.
McCafferty says that UK's eocnomic recovery is likely to prove sustainable, but says risks to economy remain elevated.
Fisher says that Syria tensions could cause upward pressure on oil prices, UK inflation.
10:02: Sterling up vs Euro as Industrial Production Disappoints
The big ecostat for the Euro on Thursday has disappointed.
Industrial Production w.d.a. (YoY) (Jul) came in at -2.1%, analysts had expected -0.1%.
Industrial Production s.a. (MoM) (Jul) came in at -1.5%, analysts had forecasted growth of 0.1%.
Eurozone not in as good a position as we had expected?
GBP/EUR rises.
10:00: GBP/AUD Gains
The British Pound / Australian Dollar exchange rate has recovered lost ground owing to some eye-raising Aussie employment figures released overnight. Find out more in our latest update on the matter.
09:41: GBP/EUR - Testing Times in the Short-Term
A busy day for the GBP/EUR ahead; we get a sense that in the short-term will prove difficult for GBP to advance against the EUR.
09:22: Sell Sterling Strength say UniCredit
A more bearish approach to the Pound Sterling offered up by UniCredit Bank in today's client brief.
"The testimony of the BoE’s Governor Mark Carney before the UK parliament will attract interest, but the bank’s forward guidance is likely to be simply re-affirmed. Any cable’s spike towards 1.59 remains a selling opportunity and we also again favor buying EUR-GBP on dips below 0.84."
08:47: GBP Bullishness to Resume, Overbought Conditions do Exist Though
The technical team at ICN Financial Markets today tell us they see GBP advancing against the US Dollar:
"The pair resumed the upside move as GBPUSD benefited from stability above 1.5750.
"We expect GBPUSD to resume bullishness as stability above the mentioned 1.5750 will support the test of 113% shown on graph at 1.5875 a breach of which will extend the upside wave.
"We can see overbought signals on momentum indicators but they will be ignored as far as the pair is stable above 1.5700 a breakout below it will trigger alarming signals.
"The trading range for today is among the key support at 1.5645 and key resistance at 1.6005.
"The general trend over short term basis is to the upside as far as areas of 1.5100 remains intact targeting 1.6010."
08:30: Carney, Miles and McCafferty to Provide Sterling with a Dose of Excitement
Today the Sterling will be driven by the testimony of a number of Bank of England MPC Members who appear before Parliament.
Lloyds Bank Research say:
"BoE Governor Carney and MPC members Carney, Fisher, Miles and McCafferty are speaking before the Parliamentary Treasury Committee on the August Inflation Report. The discussions could reveal fresh information about the Bank’s thinking following market reaction to its forward guidance announcement."
15:09: GBP in significant breakout vs US Dollar
Matt Weller at GFT is certainly bullish on the Pound's chances against the US Dollar going forward:
"The GBP/USD also spiked higher yesterday, but lost momentum above the 1.5800 level in today’s Asian session trade. Nonetheless, the daily close above the long-term 1.5750-70 resistance band represents a significant breakout, so the longer-term bias has now shifted to the topside.
"Meanwhile, we anticipated support to emerge in the previous resistance zone around 1.5750-70 if we see any dips later today, potentially providing an opportunity to enter into the longer-term uptrend at a more favourable rate."