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Pound Gains with Help of Weale’s Comments

By , March 26, 2014 6:41 pm

20-pound banknotesThe Great Britain pound rallied yesterday as Monetary Policy Committee member Martin Weale talked about a potential increase of interest rates. The currency kept most of its gains versus the US dollar but retreated against the Japanese yen today.

Weale said in an interview to the Reading Post that interest rates should not remain low indefinitely and will rise as the economy normalizes. He explained:

While my best guess is any rises will be relatively gradual, the committee can’t give any guarantees about where interest rates will be in the future because, fairly obviously, it’s not possible to say what will happen in the future.

The sterling rose on the comments but had hard times keeping gains against the yen as the Japanese currency was strengthening on concerns about rising tensions between Russia and Ukraine.

GBP/USD climbed from 1.6528 to 1.6580 yesterday and traded at 1.6572 as of 1:34 GMT today. GBP/JPY slipped from 169.16 to 168.88.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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UK Pound Higher, Even After CPI Disappointment

By , March 25, 2014 7:19 am

Mix of pound billsThe UK pound is higher today, gaining ground even after the latest CPI data shows that inflation remains below 2 per cent. The news isn’t phasing the sterling, which is higher against most of its major counterparts.

The Office for National Statistics reports that CPI was at 1.7 per cent in February, following a reading of 1.9 per cent in January. The Bank of England and other policymakers aim to keep inflation below 2 per cent. There had been a couple months ago indicating that interest rates would have to be raised to keep a lid on inflation, but this latest reading seems to indicate that a rate hike won’t be needed until later.

UK pound is higher on the news, even though it means continued loose monetary policy. Politicians like Prime Minister David Cameron said the news was good, indicating that the economy is growing, but at a rate that keeps inflation from spiraling out of control. The news seems to be enough to give the pound a bit of a boost, and sterling is benefitting from better stock performances as well.

At 13:47 GMT GBP/USD is up to 1.6507 from the open at 1.6499. EUR/GBP is down to 0.8348 from the open at 0.8389. GBP/JPY is up to 169.0840 from the open at 168.6750.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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Pound Gains After Employment Report

By , March 19, 2014 12:32 pm

Focus on 5-pound noteThe Great Britain pound gained today after positive employment report reinforced the favorable outlook for Britain’s economy. The currency retained strength even as the central bank voiced concerns about the sterling’s appreciation.

Unemployment claims fell by 34,600 in February from the previous month, exceeding the forecast of 23,300 drop. The unemployment rate stayed at 7.2 percent. The Bank of England released the minutes of its March policy meeting, voicing opinion that the impact of the sterling’s appreciation may have a limited impact on the economy:

Despite sterling’s gradual 10% appreciation over the past year, the Committee judged it most likely that the contribution to CPI inflation from imported prices remained slightly positive, reflecting the pass-through of past increases in world prices.

GBP/USD rose from 1.6591 to 1.6632 and GBP/JPY advanced from 168.30 to 168.91 as of 17:12 GMT today.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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Pound Remains Soft as Carney Speaks About Low Interest Rates

By , March 18, 2014 10:56 pm

Close-up of the UK pound noteThe Great Britain fell yesterday and retained losses today as Bank of England Governor Mark Carney reiterated in his speech the commitment to keep interest rates low for a prolonged period of time.

Carney said during his speech at Cass Business School in London:

As the MPC has signalled, a low for long interest rate environment will likely be with us for some time. The MPC’s new guidance that any adjustments in rates, when they come, will be limited and gradual helps provide confidence to households and businesses that the MPC won’t take risks with the recovery.

As one could expect, such comments did not help the sterling, which was already struggling despite positive fundamentals.

GBP/USD declined from 1.6635 to 1.6590 yesterday and resided near this level as of 4:37 GMT today. GBP/JPY traded at 168.37 after falling from 169.29 to 168.30.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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Account Deficit, Market Worries Weigh on UK Pound

By , March 14, 2014 7:22 am

Close-up of the UK pound noteUK pound is lower today, thanks in large part to its account deficit and to market worries surrounding the events unfolding in Crimea. With stocks plunging and concerns about what’s next causing uncertainty, combined with issues in the United Kingdom, the pound isn’t on very stable ground.

Sterling is lower today, dropping against most of its major counterparts. Risk appetite is hard to find today as stock markets around the world struggle. UK pound is tied to stock performances, and the upheaval isn’t good for the pound. Worries about Crimea predominate, since there are concerns that a referendum in favor of joining Russia could change the economic and political balance in Europe — especially since many countries have doubled-down on their insistence that Russia stay out.

Also weighing on the pound is the fact that the account deficit continues to cause problems. According to the Office for National Statistics, the trade gap widened from 7.7 billion pounds in December to 9.8 billion pounds in January. This gap has many at the Bank of England concerned, and this is one of the reasons for a floundering pound.

At 13:41 GMT GBP/USD is down to 1.6601 from the open at 1.6624. EUR/GBP is up to 0.8375 from the open at 0.8342. GBP/JPY is down to 168.4200 from the open at 169.2850.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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Pound Withstands Unfavorable Housing Data

By , March 5, 2014 7:18 pm

The Great Britain pound was strong today is spite of economic data that was mixed at best. The housing data was very poor, while the service sector expanded with decent pace even though the growth was a little bit slower.

The Shop Price Index of British Retail Consortium fell 1.4 percent in February, year-on-year, declining for the tenth straight month. It was the longest deflation period on the record. At the same time, the Markit/CIPS UK Services Purchasing Managers’ Index was little changed at 58.2 in February. It is the lowest figure since June, but it is also relatively high and ”indicative of a sharp rise in activity on a monthly basis”.

GBP/USD climbed from 1.6637 to 1.6714 and GBP/JPY advanced from 170.31 to 171.08 as of 23:54 GMT today.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

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UK Pound Recovers After Earlier Drop

By , March 4, 2014 7:54 am

Focus on 5-pound noteUK pound is regaining lost ground against the US dollar today. Earlier, sterling fell against the greenback after the release of the latest PMI data. Now, though, the UK pound is gaining against its low beta counterparts as risk appetite soars.

The latest economic news out of the United Kingdom was somewhat disappointing, with the Construction PMI at 62.6. Estimates for February had put the PMI at 63.2, so the lower reading sent the UK pound lower against its major counterparts.

Now, though, the pound has recovered against the dollar and the yen and is moving higher as risk appetite returns to the markets. Concerns over Ukraine have eased just a little bit, and stock markets around the world are recovering — a situation that is usually positive for the pound.

Also, Canada has announced that it’s adding UK pound assets to its foreign exchange account. This means more demand for the pound, and that is helping sterling gain a some of its lost ground from earlier.

At 14:18 GMT GBP/USD is up to 1.6697 from the open at 1.6657, and recovered from its earlier low of 1.6640. EUR/GBP has pulled back to 0.8240 from the open at 0.8243. GBP/JPY is also higher, moving up to 170.1110 from the open at 168.8915.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Forex News

Pound Retreats After Week of Gains

By , February 22, 2014 11:10 am

A fan of 20-pound billsThis week was not particularly good for the Great Britain pound. The currency was flat versus the Japanese yen, which itself was very weak, and fell against other major currencies, including the US dollar and the euro.

The sterling started the week soft due to fundamental data that was not particularly good. The currency extended losses as the minutes of the latest Bank of England monetary policy meeting showed that UK policy makers are not in a hurry to raise interest rates. There were some good economic reports too, but most of indicators were bad and the currency retained weakness till the end of the week.

The pound’s weekly drop followed the week of a very strong rally, and the decline was nowhere as big as the previous gains. It means that this week’s drop may be nothing more than a correction after the currency has rallied too far too quickly. Yet the fact that economic data was mostly worse-than-expected is troubling and may lead to further weakness of the sterling.

GBP/USD slid from 1.6766 to 1.6636 during this week, while its weekly high of 1.6822 was the strongest since May 2011. GBP/JPY opened at 170.40 and closed at 170.63. EUR/GBP climbed from 0.8174 to 0.8256, rebounding from the weekly low of 0.8157 — the lowest since January 10.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Forex News

Pound Hurt by Retail Sales Report

By , February 21, 2014 10:41 am

UK coins on banknotesThe Great Britain pound fell against the US dollar and the euro today, erasing previous gains, as the retail sales report was even worse than pessimistic expectations. The currency managed to preserve gains versus the Japanese yen.

Retail sales dropped 1.5 percent in January from a month, compared to the forecast of 0.9 percent drop. It followed the particularly strong growth by 2.5 percent.

Yesterday, Confederation of British Industry released a manufacturing report and it was rather good. Anna Leach, CBI Head of Economic Analysis, said:

The manufacturing sector shows continued signs of improvement with demand high and steady and output growing strongly.

Growth is increasingly broad-based and firms’ growth expectations are the highest for several months.

As the UK and global economies continue to strengthen over the coming months, we expect conditions to continue to improve for UK manufacturers and to increasingly feed through to business investment.

The pound was not particularly strong this week and today’s data just added to the downward momentum.

GBP/USD dropped from 1.6649 to 1.6621 as of 17:19 GMT today after rallying to 1.6724. GBP/JPY was up from 170.28 to 170.69, retreating from the daily maximum of 171.72. EUR/GBP climbed from 0.8237 to 0.8258, bouncing from 0.8215.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Forex News

Pound Struggles to Rise After BoE Minutes & Employment Data

By , February 19, 2014 9:42 am

The Great Britain pound was flat versus the US dollar and fell against the Japanese yen after the release of the central bank’s policy meeting minutes and the employment data. The sterling is struggling to rise higher as of now.

The employment data was fairly good. At the same time, the minutes of the February monetary policy meeting showed that policy makers voted unanimously to keep the accommodative policy in place. It looks like the Bank of England is content to keep waiting until economic recovery demonstrates more resilience. This hurt the sterling, though the currency attempts to recover.

GBP/USD near its opening level of 1.6682 as of 14:52 GMT today after falling to 1.6636 earlier. GBP/JPY was down from 170.74 to 169.60 before trading at 170.34.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

Forex News