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UK Pound Pauses After Gains Earlier This Week

By , July 18, 2014 9:14 am

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UK pound is pausing today, looking for consolidation at the end of this week after solid gains driven by encouraging economic data. More strength is expected for the sterling going forward, especially against the euro, thanks to the improving economic picture. So while the pound is lower today, it is likely to strengthen in coming weeks. (…)Read the rest of UK Pound Pauses After Gains Earlier This Week […]

The post UK Pound Pauses After Gains Earlier This Week appeared first on Forex News.

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Pound Under Pressure as UK Recovery Wanes

By , July 10, 2014 4:12 pm

Close-up of the UK pound notePoor economic data was weighing on the Great Britain pound recently and today’s trading session was not different. Housing and trade data came out worse than was expected, suggesting the Britain’s recovery is losing steam. The Bank of England remained passive at today’s policy meeting.

Royal Institution of Chartered Surveyors reported that the House Price Balance was at 53 percent in June, below expected 55 percent, as demand for property dropped to the lowest since the beginning of 2013 after the Bank of England signaled that it is going to take measures for cooling the housing market. The trade balance demonstrated a deficit of £9.2 billion in May, above the predicted value of £9.0 billion.

The sterling dropped after the reports, though trimmed its losses by now. In fact, the UK currency was able to gain on the euro, which was dragged down by the crisis in Portugal’s banking system.

As was widely expected, the BoE left its monetary policy unchanged, keeping the Bank Rate at 0.5 percent and the asset purchase program at £375 billion.

GBP/USD dropped from 1.7157 to 1.7105 before trading at 1.7132 as of 21:11 GMT today. GBP/JPY was at about 173.61 following the drop from 174.36 to 172.95. EUR/GBP rallied from 0.7950 to 0.7968 but retreated to 0.7942 later.

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 Under Pressure as UK Recovery Wanes

By , July 10, 2014 4:12 pm

Close-up of the UK pound notePoor economic data was weighing on the Great Britain pound recently and today’s trading session was not different. Housing and trade data came out worse than was expected, suggesting the Britain’s recovery is losing steam. The Bank of England remained passive at today’s policy meeting.

Royal Institution of Chartered Surveyors reported that the House Price Balance was at 53 percent in June, below expected 55 percent, as demand for property dropped to the lowest since the beginning of 2013 after the Bank of England signaled that it is going to take measures for cooling the housing market. The trade balance demonstrated a deficit of £9.2 billion in May, above the predicted value of £9.0 billion.

The sterling dropped after the reports, though trimmed its losses by now. In fact, the UK currency was able to gain on the euro, which was dragged down by the crisis in Portugal’s banking system.

As was widely expected, the BoE left its monetary policy unchanged, keeping the Bank Rate at 0.5 percent and the asset purchase program at £375 billion.

GBP/USD dropped from 1.7157 to 1.7105 before trading at 1.7132 as of 21:11 GMT today. GBP/JPY was at about 173.61 following the drop from 174.36 to 172.95. EUR/GBP rallied from 0.7950 to 0.7968 but retreated to 0.7942 later.

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 Stays Strong, Endangering UK Economy

By , July 9, 2014 6:27 pm

A fan of 50-pound billsThe Great Britain pound fell at the first half of today’s trading session as another set of poor economic indicators was released. Yet the currency managed to bounce in the second half, trimming its losses against the euro and gaining on the US dollar and the Japanese yen.

It looks like the sterling intends to keep its strength, making economists concerned. Strong currency is not necessary what the recovering economy of the United Kingdom needs right now, and there is a possibility that the pound’s rally will hurt economic recovery. This means that the higher the currency goes the deeper the eventual drop should be.

Indeed, the latest economic reports confirmed that the recovery is struggling. The Shop Price Index of British Retail Consortium fell 1.8 percent in June, demonstrating the biggest deflation since the data series started in December 2006. The Halifax House Price Index dropped 0.6 percent in June, more than was expected by analysts.

GBP/USD advanced from 1.7130 to 1.7154 as of 22:58 GMT today after falling to 1.7094. GBP/JPY was up from 173.98 to 174.29. EUR/GBP went up from 0.7945 to 0.7951 but retreated from the daily high of 0.7963.

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 Struggles as Rally Fades

By , July 8, 2014 1:43 am

Stacks of coins and a fan of pound notesUK pound is struggling today, heading lower against many of its major counterparts, as the recent rally fades. Expectations that the Bank of England would be among the first to start boosting rates again have helped strengthen the pound, but the situation has leveled out and the pound is lower.

Even though the recent British PMI reading was better than expected, the recent rally seems to be coming to a close for the sterling. According to Commodities Futures Trading Commission, bullish bets on the UK pound have recently to highs not seen since just before the financial crisis.

As a result, some think that demand for the pound is reaching its peak, and there isn’t a lot of reason to buy. Sterling has seen a great deal of success recently, with its improving economy and expectations of a rate hike from the Bank of England.

However, some of the enthusiasm has waned a bit. There is profit taking, as well as the realization that the Federal Reserve will probably start raising rates as well, making the pound less unique in that regard.

At 12:48 GMT GBP/USD is down to 1.7119 from the open at 1.7169. EUR/GBP is up to 0.7940 form the open at 0.7919. GBP/JPY is down to 174.4140 from the open at 175.2350.

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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Short-Term Forecast for UK Pound Ahead of BoE Meeting

By , July 7, 2014 8:14 pm

The Great Britain pound has been a remarkable performer on the Forex market recently but lost its upward momentum during the end of the last week. Will the currency be able to resume its thrust to the upside or the period of strength has come to an end?

Fundamentals still look good for the currency, though not much economic data is expected this week. The most important event will be the Bank of England monetary policy meeting on July 10. Yet it is likely that the central bank will keep the monetary policy the same, and there is a high probability that the bank will not release a detailed policy statement, meaning that the policy decision will not sway the sterling in either direction. Still, the interest rate outlook remains favorable for the UK currency as market participants count on the central bank to start raising interest rates in not-so-distant future.

As for other news, a report on manufacturing production will be released today. Forecasters predict that it will show 0.4 percent growth for May, the same rate as in the preceding month.

Pound’s performance will likely be different against different peers. It is likely that the UK currency will struggle against the dollar as the US currency is also supported by expectations of tighter monetary policy relatively soon. This makes Forex Crunch be neutral on GPB/USD. The sterling has a better chance to rally against currencies with no support from an interest rate outlook, like the euro and the yen. The shared 18-nation currency is especially vulnerable due to negative interest rates implemented by the European Central Bank. Such considerations make DailyFX be bullish on the pound in general.

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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Economic Data Helps Pound Against Euro

By , July 4, 2014 10:34 am

Focus on digits on UK pound notesThe pound may be retreating a bit against some of its counterparts, but sterling is seeing solid support against the euro today. Thanks to the latest round of economic data, pound is gaining against the euro, even though it is down against currencies like the yen and the dollar.

A round of positive data gave the pound a bit of a boost yesterday, and today the sterling is still seeing some help from that corner — at least against the euro.

UK housing prices are on the rise again, and this has many thinking that the Bank of England might need to take steps to cool the market a little bit. The BOE might decide to increase interest rates to keep things under control, and that would be positive for the UK pound. This is a markedly different situation from the one in the eurozone, in which the ECB is trying to stimulate the economy.

Pound isn’t seeing the same gains against the dollar and the yen, though. The dollar is higher on its own better economic data, and the yen is seeing some strength again.

At 13:09 GMT GBP/USD is down to 1.7142 from the open at 1.7155. EUR/GBP is down to 0.72926 from the open at 0.7934. GBP/JPY is down to 174.9545 from the open at 175.3050.

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 Drops, Driven by Dovish Comments from Carney

By , June 24, 2014 11:05 am

Stack of coins on 10-pound and 20-pound billsThe Great Britain pound dropped today against the majority of most-traded currencies as UK policy makers tempered bets on interest rate hikes in near future by their dovish comments. Market participants, who have thought that central bank will tighten monetary policy soon, were unprepared for this.

Bank of England Governor Mark Carney together with some other Bank members were speaking today at the Treasury Committee Hearing about the Inflation report, and their comments were unexpectedly dovish. Carney said:

Developments on the wage front suggest to me that there has been more spare capacity in the labor market than we had thought.

While the Governor did not altogether scrap the plans to raise interest rates in the foreseeable future, he damped monetary tightening expectations:

As the economy progresses, the time to normalize interest rates is edging closer. What’s most relevant is our view that those adjustments will be to a level of interest rates, through a gradual process, that’s likely to be materially lower than historic averages.

Today’s comments were a stark contrast to the previous words of policy makers, which made traders think that an increase of rates is imminent. It made the pound soft, and this was not surprising considering that the currency was rising mostly due to expectations of higher borrowing costs.

GBP/USD was down from 1.7027 to 1.6976, and GBP/JPY dropped from 173.54 to 173.23 as of 17:49 GMT today. EUR/GBP went up from 0.7989 to 0.8007, reaching the daily high of 0.8024.

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 Slips Against US Dollar

By , June 23, 2014 7:52 am

Focus on digits on UK pound notesUK pound has slipped against the US dollar, even after a stronger week that saw sterling reach highs not seen in five years. Since the end of a strong week, the pound is down against the dollar to start a new week. It is also down against the yen, and even slightly lower against the euro.

Last week, expectations that an interest rate hike will come from the Bank of England sometime in the relatively near future helped the sterling gain ground. Interest rate differentials are important right now, and the fact that the Federal Reserve seems to be waffling a bit, and the European Central Bank is likely to continuing easing, means the upper hand belongs to the pound.

However, the recent rally for the pound seems to be stalling. There aren’t major economic reports expected from the United Kingdom this week, and better economic data from the United States could help the dollar. And, indeed, the greenback is rising against the sterling today. Some of that may be due to profit taking, though.

At 13:32 GMT GBP/USD is lower today, dropping to 1.7008 from the open at 1.7017. EUR/GBP slightly higher, moving up to 0.7992 from the open at 0.7987. GBP/JPY is also lower, falling to 173.2725 from the open at 173.7450.

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 Backs Off After Reaching Multi-Year Highs

By , June 16, 2014 8:46 pm

A fan of 50-pound billsThe Great Britain pound fell against the US dollar and rose versus the Japanese yen on the current trading session, reversing its Monday’s movement. The sterling also continued to fall versus the euro. This does not necessary mean that the UK currency lost its bullish momentum as it reached multi-year highs on the previous trading session.

The strength of the pound is the major theme on the Forex market right now amid otherwise quiet trading. It is really not surprise considering that UK policy makers became bolder recently and are not shy to speak with confidence about future interest rate increases.

And this openness is not limited just to Bank of England Governor Mark Carney, a known hawk. BoE Deputy Governor Charlie Bean said yesterday that an interest rate hike “will be a symbolic step, because it will be an indication that we are on the road back to normality”. Considering the comments many analysts think that the BoE will raise borrowing costs at the beginning of the next year, while some believe that the central bank may act even this year.

GBP/USD fell from 1.6983 to 1.6963 as of 3:42 GMT today after rising to 1.7011 yesterday — the highest price since August 2009. GBP/JPY went up from 172.94 to 173.14 before retreating to its opening level. EUR/GBP was up from 0.7992 to 0.7997, while its yesterday’s low of 0.7959 was the weakest rate since October 2012.

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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