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British Pound (GBP): UK Trade Figures Deliver a Surprise, Sterling Firm in Mid-Morning Trade

Updated: The GBP is an underperformer on the first Friday of April. With US Non-FarmGBP exchange rate uptrend Payrolls coming out in support of the commodity dollar complex we are seeing the UK currency suffer against the likes of the AUD, CAD and NZD. The unit is stable against the USD and EUR.

Those hoping for the pound sterling uptrend to re-establish itself will be disappointed. The deterioration in the GBP-CAD uptrend (image at righ) is representative of the malaise being seen by many of the CAD crosses.

Keep in touch with our Live Coverage Here. For the archived material for the day in question please scroll through please scroll down. 

By Gary Howes
British pound sterling today

Live British Pound Rates.

  • Pound Sterling / Euro exchange rate: 0.3 pct higher at 1.2047.
  • Pound Sterling / US dollar: 0.18 pct higher at 1.6353.
  • Pound Sterling / Australian dollar: 0.36 pct higher at 1.8288.
  • Pound Sterling / Canadian dollar rate: 0.21 pct higher at 1.8111.
  • Pound Sterling / New Zealand dollar rate: 0.36 pct higher at 1.9869.
  • Pound Sterling / South African Rand rate: 0.31 pct higher at 18.0719.

  • BE AWARE: All the above quotes are taken from the wholesale inter-bank markets. Your bank will affix a spread to the rate at their discretion 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.

    12:32: Speculation grows ahead of next week's Quarterly Inflation report

    The faster-than-expected improvement in unemployment will soon place Carney’s credibility in danger.

    What will the Bank do once the unemployment rate at 7 pct is hit?

    "The BoE will publish its quarterly inflation report on February 12th giving Carney a chance to modify his stance hoping the markets would understand. We expect the 7.0% jobless target to be either lowered, or to be offset by a Fed-like statement on rates “to remain at low levels even after the unemployment target is hit”. Just to make sure that the recovery momentum is not wounded." - Swissquote Bank.

    12:14: EUR/GBP facing strong resistance

    ICN Financial make the following note on the EUR/GBP slamming into resistance:

    "The pair is facing strong resistance from the main Falling Wedge shown on graph at 0.8345, where the pair needs to breach this level to confirm the resumption of the upside move over intraday and short term basis, eying 0.8410 initially, and then 0.8560.

    "We still favour the general upside move as far as the pair is stable above 0.8285 and most importantly 0.8160. The pair needs to hold above 0.8285 and most importantly 0.8160, noting that temporary sideways fluctuation might be needed to gain upside momentum to support the suggested upside move."

    11:28: Bat pattern suggests GBP/USD upside

    ICN Financial give an interesting note on the outlook for GBP/USD:

    "Despite the overall negativity, the pair confirmed the bullish alternative harmonic Bat Pattern that remains valid by stabilising above 1.6250. Linear Regression Indicators crossed over encouraging us to use this pattern today, as AROON is showing positivity and MACD is moving to the upside.

    "Therefore, we bet on an upside move and stabilising above 1.6340 shall push the pair towards 1.6395. Breaching 1.6395 will trigger further bullishness towards 1.6440. On the other hand, we cannot ignore that breaking 1.6250 will weaken the intraday upside move today."

    11:24: Weakness to persist in GBP/USD

    Adding to the previous comment, we note Swissquote are also bearish on GBP/USD:

    "The Cable continues seeing support above the 100-dma (today at 1.6259). Short term trend and momentum indicators remain negative calling for the weakness to stay in GBPUSD before next week’s quarterly inflation report due on February 12th."

    11:23: Mixed views on EUR/GBP outlook

    A couple of mixed short-term viewpoints on the euro pound rate today:

    "While resistance holds on closing basis at 0.8349, the cross remains vulnerable as bearish conditions persist. Support is at 0.8266 ahead of 0.8160." - UBS.

    "EURGBP spiked to 0.83503 post-Draghi and hit the downtrend upper band; we keep our tactical bullish view as long as the 21-dma (today at 0.82716) support holds." - Swissquote Bank.

    10:46: Scope for upside in GBP/USD

    "As a reaction to the recent sharp sell-off which stalled just above main support at 1.6220, there’s scope for upside in the near-term. Resistance is at 1.6411 ahead of 1.6509." - UBS.

    10:14: GBP/NZD shaping up for a rebound?

    "NZD may underperform as the slowdown of economic growth in China may reduce the export from New Zealand. Technical Analysis: GBP/NZD may rebound toward 2.0200, with support at 1.9632." - Citigroup.

    10:09: Market still bullish on GBP/USD

    Craig Erlam on what is still said to be a pro-GBP marketplace:

    "Sterling is pushing a little higher this morning following three sessions in which the pair has been stuck in a very tight range. This doesn’t appear to be too much of a case of a battle going on between bulls and bears, as much as it is slightly lower trading volumes and potential uncertainty ahead of today’s hugely important non-farm payrolls figure which I’m sure will significantly widen the trading range.

    "What is important is that throughout this week, 1.6260, 50 fib level and previous support and resistance, has held up as a significant level of support. This suggests that despite the lack of gains in the pair, the market is still bullish and clearly keen to protect this level."

    09:59: Strong comeback in pound vs euro rate

    The pound is moving against the euro following today's trade data beat. However, the currency is static elsewhere.

    09:30: Trade data improves, industrial data misses mark

    The British pound (GBP) remains stable, this after some mixed data is released by the ONS. Industrial and manufacturing production missed the mark but trade figures provided a welcome surprise:

  • Industrial Production (YoY) (Dec): Came in at 1.8%, expected 2.3%, last month 2.5%
  • Manufacturing Production (YoY) (Dec): Came in at 1.5%, expected 2.3%, last month 2.8%
  • Goods Trade Balance (Dec): Came in at -7.717B vs expected £-9.300B, last month £-9.439B
  • Trade Balance; non-EU (Dec): Came in at £-2.198B vs expected £-3.100B, last month £-3.023B.
  • 08:54: Data to watch at 09:30

  • Industrial Production (YoY) (Dec): expected 2.3%, last month 2.5%
  • Manufacturing Production (YoY) (Dec): expected 2.3%, last month 2.8%
  • Goods Trade Balance (Dec): expected £-9.300B, last month £-9.439B
  • Trade Balance; non-EU (Dec): expected £-3.100B, last month £-3.023B.
  • 08:49: Today could make or break the dollar

    A reminder that the big event of the day is the February non-farm payroll report out of the US due at 13:30 GMT.

    Kathy Lien says today's report will make or break the US dollar: "The non-farm payrolls report is always an important release for the U.S. dollar but this month in particular, it could make or break the greenback. In January, the U.S. dollar collapsed and officially peaked after the worst NFP report in nearly 3 years. This month investors are hoping for a strong rebound that will restore demand for U.S. assets. Economists are looking for non-farm payrolls to more than double and rise from 74k to 180k."

    08:32: Stable outlook for GBP

    "A firmer UK IP today and some minor negative surprises from US labour data may offer cable further stabilisation above 1.6350, while EUR-GBP is likely to further struggle at around 0.83. - UniCredit Bank.

    08:16: GBP to be supported say Lloyds

    More from Lloyds:

    "The underlying positive UK picture should see GBP remain well supported and there are unlikely to be any triggers to change that. The market will look ahead to next week’s Quarterly Inflation Report for any changes to the Bank’s forward guidance. The 1.6250 level remains decent support for GBP/USD. For EUR/GBP, the 100 day moving average at 0.8383 will provide some resistance on a clear break above 0.8353 (retracement level)."

    08:06: Keep an eye on trade data

    Today's calendar highlight is the release of trade data.

    "UK industrial production and trade data may attract some market interest this morning, though neither look likely to be major market movers. The preliminary Q4 GDP estimate released last week implied that manufacturing output grew by around 0.6-0.9% m/m in December. Market forecasts are at the lower end of this range, while our economists are forecasting a stronger rise of 0.8%." - Lloyds Bank Research.

    08:00: British pound (GBP) firms up

    The British pound is in consolidate mode and we are seeing the currency open at better levels agains most major currencies. That the sell-off has ceased bodes well for those anticipating higher rates in 2014. However, we expect February to see a sheepish approach to the UK currency, bar any positive shocks in next week's quarterly inflation report from the Bank of England.

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