FOREXYARD: Forex News Blog | |
- British Employment Sector Improving
- Australian Data Continues to Disappoint
- UK Unemployment Claims Unexpectedly Rise as Sterling Slides versus the Euro
- UK and US Monetary Policy on the Docket
- Euro Rallies into the Close
| British Employment Sector Improving Posted: 18 May 2011 05:13 AM PDT
Great Britain published its unemployment rate this morning, revealing a 0.2% decline from 7.9% to 7.7% for the preceding month. The pound was trading lower, however, as the Claimant Count Change for April showed 12,000 more people filing for unemployment benefits than was expected. While average hourly earnings was also up by 2.7% in Great Britain, usually indicating job growth, the claimant count figure superseded any potential bullishness expected out of the UK economy. The British pound (GBP) has been moving downward against its currency rivals today, with the GBP/USD reaching as low as 1.6170 and the EUR/GBP climbing as high as 0.8806. Both of these major pairs appear to have momentum favoring GBP bearishness. The unemployment rate was a surprise for many, though, considering the recent data out of the UK economy these past several months. Some analysts had shown expectations for a healthier rise in employment, but a faltering industrial and manufacturing sector has recently weighed on the British job market. The hike in wages was a healthy indicator, though it too may only be a lagging reflection of what was occurring in the early days of April. The stagnation in prices experienced since then appears to have more pull than anything else. Read more forex trading news on our forex blog. |
| Australian Data Continues to Disappoint Posted: 18 May 2011 05:08 AM PDT
Following up after Monday's home and automotive sales in Australia, this morning's data from the land down under also revealed growing weakness. On the docket today was Westpac Banking Corporation's consumer sentiment report and the Australian Bureau of Statistics' wage price index. Westpac's sentiment report came with no expectations, which made its impact less felt in trading circles. The report measures the change in the level of a diffusion index based on surveyed consumers regarding past and future economic conditions. This month the index fell 1.3% in sentiment; a change from the previous month's rise of 1.2%. The Bureau of Statistics in Australia then published its wage price index an hour later at 2:30 GMT. The figure was expected to show 1.2% growth for April, beating out last month's 1.0% reading. The actual result, however, was a muted growth of only 0.8%. This data, coupled with Monday's sales figures, has helped pull the Aussie (AUD) lower against most of its currency counterparts. Forex traders have witnessed the AUD/USD, as an example, pulling lower over the past several days with traders pricing in the weakened fundamentals. Just this morning, the pair moved from 1.0655 to its current price near 1.0600, with further bearishness being anticipated. Read more forex trading news on our forex blog. |
| UK Unemployment Claims Unexpectedly Rise as Sterling Slides versus the Euro Posted: 18 May 2011 03:05 AM PDT
Sterling is lower after an unexpected jump in UK unemployment claims while the unemployment rate surprisingly declined. As expected, meeting minutes from the Bank of England's latest policy meeting showed the MPC is determined to hold interest rates at ultra-low levels in the near term. A surprise jump in unemployment claims sent sterling lower versus both the dollar and the euro. New jobless claims rose by 12,400. The negative tone of the report was underscored as the previous month's jobless claims were revised lower to 6,400 from 700. Economists had forecasted new claims of only 400. Despite the statistics office claims of a one off adjustment in the way the report is calculated may account for the increase in jobless claims, the negative data highlights the slow recovery the UK economy faces. The unemployment rate surprisingly ticked lower to 7.9% from 7.8% on expectations of an increase to 7.9%. It is a bright spot on an otherwise bleak UK unemployment outlook. At the same time the BoE released its last policy meeting minutes which showed the Monetary Policy Committee is still holding firm to its ultra-loose monetary policy. The MPC maintained its 6 to 3 vote in favor of holding UK interest rates at their present level of 0.5%. Earlier in the week BoE Governor Mervyn King announced that interest rates could begin to rise in Q3 but judging from the short sterling contract market players anticipate an interest rate increase closer to November. This is despite rising inflationary pressures in the UK. Yesterday inflation numbers were released and showed a 4.5% increase from the previous year. Following the release of the unemployment claims report sterling traded lower versus both the dollar and the euro. The GBP/USD fell back to 1.6177 from 1.6268. A breach of 1.6150 would target 1.6050 from the rising trend line off of the May lows. Versus the euro the pound has lost all of yesterday's gains booked after the inflationary data was released. The EUR/GBP traded as high as 0.8812, a level that coincides with the 50-day moving average. A close above this resistance would target 0.8940 below the previous trend line from the February low. Read more forex trading news on our forex blog. |
| UK and US Monetary Policy on the Docket Posted: 17 May 2011 11:53 PM PDT
Today markets will receive monetary policy updates from both the UK and the US. Both central banks are expected to maintain a dovish policy stance while attempting to balance sub-par economic growth with future inflation expectations. Today's Economic Events GBP – Claimant Count Change – 08:30 GMT GBP – MPC Meeting Minutes – 08:30 GMT Oil – Crude Oil Inventories – 14:30 USD – FOMC Meeting Minutes JPY – Preliminary GDP – 23:50 GMT Read more forex trading news on our forex blog. |
| Posted: 17 May 2011 12:23 PM PDT
The euro recovered in the US session to trade higher following a late day rally as the currency looks to close up on the day. However, today's move in the US trading session may be a "Dead Cat Bounce" as the EUR/USD remained inside a defined range and event risk remains following the European finance minister's meeting. A mid-US session rally helped the EUR/USD trade as high as 1.4235 before falling back to 1.4220. Weaker than expected US housing data and industrial production numbers originally fed into USD buying but as the trading wore on the euro began to draw bids. The euro rally is surprising given the European finance minister's meeting did approve an aid package for Portugal but the jury is still out on Ireland and Greece. This subsequent event risk hangs over the head of the euro. Today's price action shows this may be a short rally before further potential declines. The daily high coincides with yesterday's high as well as a downward sloping channel line off of the May 11th peak. The lower channel line falls off of the May 9th low. Cable went on a rollercoaster ride after the release of higher than expected UK inflation numbers. The GBP/USD rose to as high as 1.6302 before falling back to 1.6185 and looks to close near 1.6250. Tomorrow UK unemployment data will be released along with the BOE MPC Meeting Minutes. No change is expected in the voting as the meeting took place prior to the upcoming departure of known hawk Andrew Sentance. His replacement is former Goldman Sachs economist Ben Broadbent who maintains the view of holding UK interest rates at ultra-low levels until the economy gains traction. Q1 UK GDP expanded by only 0.5% following a Q4 contraction of -0.5%. GBP/USD support comes in a 1.6140 with resistance at 1.6515. Read more forex trading news on our forex blog. |
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