The pound posted gains against the aussie yesterday, reversing its steep fall at the end of last week as investors cashed profits, closing up 0.8% at 1.7822. The aussie was broadly weaker in trading yesterday as investors took the opportunity to take profits following sharp gains made on Friday.The price of gold also continued to fall yesterday, discouraging investment in the commodity linked currency. Gold quoted around 1053/oz yesterday, though probably due more to profit taking than lack of strength.In trading this morning, the aussie is slightly up on the day, though investors are likely to remain wary ahead of sales data in the UK and a consumer confidence survey in the USIn addition, investors may well caution against long positions ahead of Thursday when the US 3 rd quarter GDP figure is released. The economy is forecast to have grown by 3.3% in the quarter, though if it undershoots this target it could trigger a wave of selling in riskier currencies.
Posts Tagged ‘Gdp’
Sterling made gains against the aussie as the price of gold fell back
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The pound rebounded strongly vs the euro yesterday with analysts suspecting that sterling could be oversold
After an unsteady early session, the pound rebounded strongly from Friday’s sell off, to close 1.1% up. The pound recovered steadily through the day after data revealed that the German Gfk consumer sentiment indicator dropped to 4.0 from 4.2 in October, weaker than the median forecast of 4.5, dulling demand for the single currency.In addition UK business confidence rose to the highest in 18 months, according to a third-quarter survey, with 19% of executives polled saying the outlook for business is “good” or “very good,” up from 9% in the previous quarter, which stoked demand for the pound.Analysts hypothesised that the pound may be considerably oversold at its current value, which does present a good opportunity for British businesses.Analysts also noted two opposing arguments developing: the first is a widely held view that based on better PMI survey data there is a good chance that GDP data for Q3 will be revised up.
BNY Mellon: the British pound could stabilize near current levels
Recently, analysts Bank of New York Mellon quite confidently declared that the bearish mood of the British pound. But now the bank waiting for stabilization of the currency of Great Britain near current levels. According to the Bank’s strategy to further weakening of the pound – this is the last thing the British government wishes. In addition, published on Friday, weak GDP data may be incorrect and, therefore, further expansion of the program of quantitative easing of the Bank of England does not look quite definitely. Nevertheless, bank analysts pay attention to rumors about the revision of the credit rating of the UK, in connection with which there may well be grounds for returning to the bear’s prognosis.
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Corporate reports coming week will support the stock market
S & P500 index is inside a giant “wedge”: the resistance trend line is at the level of 1113, support the trend line – in 1058. Reason to worry: the Dow Jones transport index over the last three trading days had fallen by 6%. The dollar set new lows, rates on 10-year bonds rising. This means that while the market remains optimistic. Our strategy for today “to buy at lower prices, and we still hope to achieve our medium-term goals for S & P500 at 1121.S & P500 index is inside a giant “wedge”: the resistance trend line is at the level of 1113, support the trend line – in 1058. Reason to worry: the Dow Jones transport index over the last three trading days had fallen by 6%.Week ugotovila a lot of interesting statistics: consumer confidence, orders for durable goods and GDP for the 3 rd quarter in the U.S., not counting the other data.Saxo Bank
Sterling halted its recent rally and is slipping back sharply against the kiwi as UK GDP figure disappoints
The pound was broadly sold on Friday following a weak GDP figure, losing three cents to the kiwi dollar, to close back down at 2.1607. Data revealed that Britain’s economy has now shrunk for six quarters after it contracted by 0.4% in the most recent quarter, the longest period of contraction since records began in 1955. Analysts have now renewed their discussion over the possibility of the Bank of England retaining, or even extending, its £175 billion QE programme, which would compound sterling’s weakness. The news also confirmed that the BoE are likely to keep the benchmark interest rate at a record low of 0.5% firmly into 2010, lessening the appeal of sterling assets.
Aussie made significant gains at the end of last week and is continuing to advance this morning
In trading on Friday, the pound slipped back from two-week highs around the 1.8000 level against the aussie as a weak GDP figure dulled demand for the UK currency. A report showed that the UK failed to exit the recession in the third quarter of this year, giving the central bank more reason to keep enacting emergency measures to spur growth. The data showed that the UK contracted by a further 0.4%, disappointing expectations of a 0.2% expansion and firmly halting the pound’s progress. Where as in Australia interest rates have already been raised on the back of growing confidence in the economy, the UK may now be considering further loosening its monetary policies as recovery struggles to take hold.
Sterling fell back significantly against the dollar on Friday, as GDP figure disappoints the market
Sterling lost three cents (1.9%) to the dollar, as a weak UK quarterly GDP figure abruptly halted the pound’s recent rally. The greenback gained the most daily value against the pound in a month as the UK’s economy unexpectedly contracted in the third quarter, giving the Bank of England more reason to expand emergency measures to spur growth. It is the first time UK gross domestic product has contracted for six consecutive quarters, since quarterly figures were first recorded in 1955. The pound fell more than a cent against the US dollar following the release of the figures, losing 0.6% in two minutes, with traders particularly concerned that the UK may turn out to be the only major economy still in recession.
UK economy contracted by 0.4%, which has and will continue to weigh heavily on sterling
In an uncertain day for the UK economy, the pound lost as much as 2.0% to the euro on Friday, sharply reversing its recent rally to close down at 1.0862. Data revealed that the UK economy unexpectedly contracted by 0.4% between July and September this year, confirming that the UK is still in recession. Quarterly growth of 0.2% had been expected, although expectations had been tempered by recent figures showing no growth in retail sales in September and a 2.5% decline in industrial output in August. Importantly, the disappointing GDP figures may now lead the Bank of England to consider the possibility of extending their asset purchase scheme in their November meeting in order to sustain the evidently fragile recovery.
The current account deficit of balance of payments euro-zone 1.3 billion euros in August
In August this year the current account deficit of balance of payments euro-zone seasonally adjusted amounted to 1.3 billion euros (equivalent to a deficit of 5.0 billion euros excluding seasonal and calendar factors), said the European Central Bank. Previous value of the index revised downward – with seasonal and calendar factors balance of payments surplus amounted to 3.7 billion euros (previously reported surplus of 6.6 billion euros).On an annual basis, taking into account factors consecutive current account deficit balance for August was 106.5 billion euros (about 1,2% of GDP), compared with a deficit of 56.1 billion euros a year earlier.The total inflow of foreign direct and portfolio investment in the euro area without taking into account seasonal variations in composition for August 57 billion euros, compared with 18 billion euros in July.
Pound continued to climb against the aussie yesterday as confidence in the UK economy improved
A broadly stronger pound hit a two-week high against the aussie, briefly rising over 1.8000, as confidence in the UK economy gained momentum.Sterling jumped following the minutes from the Bank of England’s latest policy meeting, which dampened expectations of an extension to quantitative easing. The minutes appeared to move the balance of market expectations to the possibility of a pause of the government’s asset purchase scheme in November, reversing recent speculation. In addition, the aussie dollar found its strength undermined as commodity prices, most notably oil, turned lower, discouraging investors from the higher-yielding currency.
The pound posted a one cent gain against the euro yesterday, buoyed by the MPC minutes
Sterling reached a one-month high against the single currency, rallying strongly as the BoE’s latest policy meeting made no mention of further QE.The MPC minutes gave substantial support to the pound, which advanced 1.1% to reach a high of 1.1112, after they sounded a more positive tone than recent statements from policymakers suggested. It was revealed that the nine member committee had voted unanimously to leave the size of its asset purchase scheme unchanged at £175 billion, as had been widely expected, and made no direct reference to extending QE in the future.
For Britain – low interest rates and the weakening pound
With the advent of a more precise plan of the Conservative Party of Great Britain and slightly more predictable state of the economy of this country, it becomes possible to make assumptions about the future situation. Our latest economic forecast, which will be published later, reflects our average estimate compiled on the basis of stronger data and political development. In these circumstances, we expect the Conservative Party victory in the May elections with a substantial margin for the majority of seats in the cabinet. As a result, we see that monetary policy will receive a “powerful acceleration, while the fiscal experience a strong reversal.We expect to reduce state spending by 80 billion pounds, increasing revenues from indirect taxes by 20 billion pounds and “return to the development of” package valued at 3 billion pounds.
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Factors Influencing the Forex Market
A lot of people like the participants of the currency markets, economists and experts of the Central bank have been trying to understand and identify, what factors exactly drive the highs and the lows of the Forex market. A lot of experts suggest that predicting the future move or trend of the Forex market is more of an art than a science. That is because even the experts at times have to split their views in relation to the direction of the Forex market.
Technically speaking there are two schools of thoughts or approaches which is primarily used to analyze the Forex market.
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Sterling posted gains vs the single currency, with the market forecasting no change in MPC policy
Having hit a fresh six-month low against the single currency in early trading , the pound rebounded yesterday, to close up half a cent at 1.0864. Unexpectedly weak data in the UK manufacturing industry on Tuesday continued to weigh heavily on the pound, dragging sterling to a 6-month low of 1.0781. With little data out in either the UK, the eurozone, or the US yesterday, markets initially continued to take direction from Tuesday’s data, which supported sterling selling. The euro trimmed its gains though following the second quarter final GDP figure for the eurozone, which was revised downward from a contraction of 0.1% to 0.2%, dampening the broadly positive sentiment towards the currency.
Data revealed a growing confidence among New Zealand businesses, which has driven the pound down further
The pound reverted back to its downward trend against the kiwi in trading yesterday, losing 0.8% to close the day near last week’s lows at 2.2163. A strong jump in a New Zealand business confidence survey added to evidence that the economic recovery is gaining pace, supporting demand for the kiwi. The Reserve Bank of New Zealand published a bright economic outlook yesterday, which was also picked up on by investors with expectations for a rate rise strengthening. Additionally, in the US, the second quarter GDP figure was revised upward revealing that the economy had contracted by less than initially expected, which supported a move into riskier assets, although weak employment data did offset this trend slightly.
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