GBP

Good Morning:

The GBP traded lower after UK services PMI came in worse then expected at 51.3 versus the 53.0 survey and 53.1 prior reading.

The GBP/USD pair, which was on an upward trend thus far today, sold off hard after the worse then expected release of the manufacturing PMI. Show on the hourly chart below, a continuation lower could bring the pair back to the 0.0% (1.53240) line on the move from the high on August 30th to the low on August 31st. If we see a pull back, the next target to the upside is the 23.6% fibo line at 1.53828.

The UK’s Nationwide Consumer Confidence reading continued to slide in July, dropping to 56 from 63 in June and lower than the expectation of 61. The Expectations Index saw the biggest fall, continuing its downward trend since February. Nationwide noted that emergency budget and inflation pressures were constraints on consumer confidence. Cable and the rest of the risk pairs turned offered on the release.

June UK trade balance came in at -7.4B versus the forecast of -7.7B and prior showing of -8.1B.

Sterling gained slight strength against all of the major currencies following this release.

Good Morning:

Sterling traded 20+ pips lower after June PPI and man. production came in worse than expected. Here are the details:

• PPI Input (m/m) - Survey: -0.5%   Actual: -1.0%   Prior: -0.2%
• PPI Output (m/m) - Survey: 0.0%   Actual: 0.1%   Prior: -0.3%
• Industrial Production (m/m) - Survey: 0.1%   Actual: -0.5%   Prior: 0.7%

Good Morning:

The JPY rose against all currencies as speculation mounts that the US economy is slowing, and that the Fed will introduce some additional monetary easing policies.  Overall the USD fared well, except versus the Yen.
GBP lost some steam as UK services PMI came in short of expectations.  The GBP may test the 1.60 level-especially if US data comes out weak.
Overall there was not a lot of  excitement in the markets overnight-as August creeps into the FX world.

The British pound traded slightly higher after the UK’s July house prices came in much better than expected. The details are as follows:

• Halifax House Price 3mth/Year - Survey: 4.6%   Actual: 4.9%   Prior: 6.3%
• Halifax House Prices (m/m) - Survey: -0.3%   Actual: 0.6%   Prior: -0.6%

The GBP is currently trading off session lows against the USD.

In this relatively slow moving market, the British pound is trading on highs, and is continuing advances, against all of the major currencies; GBP/USD high of 1.5929. On the daily cable chart you can see that on the move from the high (1.7041) on August 4, 2009 to the low (1.4229) on May 21, 2010 the pair is testing the 61.8% at 1.5966. The pair has not traded this high since Feb 4th. With the current momentum we should see the GBP/USD reach this level.