Analysis and Recommendations: The GBP/USD recovered 45 points today but remains weak after the Bank of England turned dovish and inflation worries gained.
The GBP/USD recovered 45 points today but remains weak after the Bank of England turned dovish and inflation worries gained. The US dollar continues to hold strong after Friday’s jobs data leaving the pound to trade at 1.5099. Two major data releases from opposite ends of the world are forecast by analysts to trigger pronounced movement in the global currency markets during this week’s session.
Friday’s US labour market data took on added significance following Federal Reserve Chair Janet Yellen’s assertion last week that a December interest rate hike remained a ‘lives possibility’ from America’s rate-setters. Economists had been anticipating another showing of well below the benchmark 200,000 figure from the Non-Farm job creation aspect of the data – the result of 271,000 versus an anticipated 185,000 from the October figure therefore sent investors into a tailspin.
Brian Jacobsen of Wells Fargo explained, ‘that was an astounding number. It’s pretty clear that the Fed would be justified in hiking in December, if the economy doesn’t hit another air pocket.’
Since the end of September, the British pound has traded between 1.51 and 1.55 against the US dollar (NYSEARCA:UUP). This has been due to mostly mixed signals coming from the Fed and the Bank of England over future rate hikes. Recently, the Fed and Janet Yellen have communicated a willingness to raise rates quite possibly at its next meeting in December.
All the market was waiting for was what the Bank of England might do. On “Super Thursday” we got the message – don’t expect a rate hike anytime soon. As you can see, the market clearly got the message as the pound dropped like a rock against the dollar.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Today’s economic releases:
Cur. |
Event |
Actual |
Forecast |
Previous |
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EUR |
German Trade Balance (Sep) |
|
20.0B |
19.6B |
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EUR |
Eurogroup Meetings |
|
|
|
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USD |
FOMC Member Rosengren Speaks |
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Upcoming Economic Events that you should be monitoring:
Tuesday, November10, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
JPY |
Current Account n.s.a. (Sep) |
|
2.235T |
1.653T |
|
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GBP |
BRC Retail Sales Monitor (YoY) (Oct) |
|
|
2.6% |
|
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AUD |
Home Loans (MoM) (Sep) |
|
|
2.9% |
|
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AUD |
NAB Business Confidence (Oct) |
|
|
5 |
|
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CNY |
CPI (MoM) (Oct) |
|
-0.2% |
0.1% |
|
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CNY |
CPI (YoY) (Oct) |
|
1.5% |
1.6% |
|
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CNY |
PPI (YoY) (Oct) |
|
-5.8% |
-5.9% |
|
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EUR |
EU Finance Ministers Meeting |
|
|
|
|
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USD |
Export Price Index (MoM) (Oct) |
|
-0.2% |
-0.7% |
|
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USD |
Import Price Index (MoM) (Oct) |
|
-0.1% |
-0.1% |
Government Bond Auctions
Date Time Country
Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction
Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL
Nov 10 N/A US Holds 10-year note auction
Nov 11 10:03 Sweden Holds bond auction
Nov 11 11:15 Norway Holds bond auction
Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl
Nov 12 10:10 Italy Auctions BTPs/CCTeus
Nov 12 10:30 UK 4.25% 2039 Gilt auction
Nov 12 N/A US Holds 30-year bond auction