7:44 AM
News
June 27 (Bloomberg) -- The yen strengthened from a record low against the euro and rose versus the dollar as a decline in stock markets around the world reduced demand for higher- yielding assets funded by loans in Japan.
11:58 AM
Weak Dollar or Strong Euro
Dollar Falls to Two-Week Low on Reduced Bets Fed to Raise Rates
June 26 (Bloomberg) -- The dollar declined to the weakest level against the euro in more than two weeks as investors reduced speculation that the Federal Reserve will increase borrowing costs in August.
June 26 (Bloomberg) -- The dollar declined to the weakest level against the euro in more than two weeks as investors reduced speculation that the Federal Reserve will increase borrowing costs in August.
12:18 PM
GBPJPY Forex Trader
GBPJPY 26 JUN 2008
BUY TARGET : 213.32 / 213.54 / 213.88
SELL TARGET : 212.90 / 212.78 / 212.52
BUY TARGET : 213.32 / 213.54 / 213.88
SELL TARGET : 212.90 / 212.78 / 212.52
7:58 AM
Forex News : The Dollar
FOMC Unchanged, Increased Risks to Inflation
by Korman Tam
6/25/2008 2:30:00 PM
The Federal Reserve, as expected, held monetary policy unchanged at 2% when it announced its decision shortly after 2:00pm. However, the vote to leave rates unchanged was not by unanimous decision with Dallas Fed President Fisher voting in favor of a rate hike. Although the dollar initially jumped higher following the announcement, it quickly relinquished those gains as traders digested the accompanying statement.
Dollar Little Changed Versus Euro Before Fed Decision on Rates
June 25 (Bloomberg) -- The dollar was little changed against the euro before the Federal Reserve ends a two-day meeting at which policy makers are forecast to keep the target lending rate at the lowest level in more than three years.
The dollar pared its decline as crude oil prices fell on an unexpected increase in inventories, reducing the need to sell the U.S. currency as a hedge against inflation. Fed Chairman Ben S. Bernanke said on June 9 the central bank would ``strongly resist'' a leap in inflation expectations.
by Korman Tam
6/25/2008 2:30:00 PM
The Federal Reserve, as expected, held monetary policy unchanged at 2% when it announced its decision shortly after 2:00pm. However, the vote to leave rates unchanged was not by unanimous decision with Dallas Fed President Fisher voting in favor of a rate hike. Although the dollar initially jumped higher following the announcement, it quickly relinquished those gains as traders digested the accompanying statement.
Dollar Little Changed Versus Euro Before Fed Decision on Rates
June 25 (Bloomberg) -- The dollar was little changed against the euro before the Federal Reserve ends a two-day meeting at which policy makers are forecast to keep the target lending rate at the lowest level in more than three years.
The dollar pared its decline as crude oil prices fell on an unexpected increase in inventories, reducing the need to sell the U.S. currency as a hedge against inflation. Fed Chairman Ben S. Bernanke said on June 9 the central bank would ``strongly resist'' a leap in inflation expectations.
6:15 PM
12:47 PM
GBPJPY Free Signals From Forex Trader
GBPJPY
LONG position at 212.10
STOP LOSS below 211.60 (-50 pips).
THE TARGETS are 212.36/ 212.54
OP, SL & TP at your own risks
8:33 AM
Dollar Raises ; Buy Pound
Dollar Rises as Traders Sell Euro Versus Greenback to Buy Pound
June 19 (Bloomberg) -- The dollar rose against the euro for the first time in four days after an unexpected surge in U.K. retail sales led traders to sell the 15-nation currency versus the greenback and buy the pound.
British sterling appreciated versus the euro and the dollar after a government report showed U.K. retail sales increased in May the most since records began in 1986. The Swiss franc retreated after the central bank left its target lending rate at 2.75 percent, one of the lowest among industrialized countries.
June 19 (Bloomberg) -- The dollar rose against the euro for the first time in four days after an unexpected surge in U.K. retail sales led traders to sell the 15-nation currency versus the greenback and buy the pound.
British sterling appreciated versus the euro and the dollar after a government report showed U.K. retail sales increased in May the most since records began in 1986. The Swiss franc retreated after the central bank left its target lending rate at 2.75 percent, one of the lowest among industrialized countries.
8:25 AM
GBPJPY TODAY
GBPJPY
SHORT position at 213.00
STOP LOSS above 213.50 (- 50 pips).
THE TARGETS are 212.38 / 212.02 / 211.74
OP, SL & TP at your own risks
SHORT position at 213.00
STOP LOSS above 213.50 (- 50 pips).
THE TARGETS are 212.38 / 212.02 / 211.74
OP, SL & TP at your own risks
10:24 AM
USDJPY
Dollar Trades Near Strongest Versus Yen Since February on Rates
June 18 (Bloomberg) -- The dollar traded near a four-month high against the yen on bets the Federal Reserve will increase borrowing costs later this year while the Bank of Japan holds its target at the lowest level among major economies.
June 18 (Bloomberg) -- The dollar traded near a four-month high against the yen on bets the Federal Reserve will increase borrowing costs later this year while the Bank of Japan holds its target at the lowest level among major economies.
8:13 AM
Dollar Falls
Dollar Falls Versus Euro as Housing Starts Reach 17-Year Low
June 17 (Bloomberg) -- The dollar fell against the euro after a government report showed housing starts dropped in May to a 17-year low, raising speculation the Federal Reserve will delay increasing borrowing costs this year.
The pound weakened versus the euro and the dollar after Bank of England Governor Mervyn King said the path to bringing inflation within the central bank's target is ``uncertain.'' South Korea's won rose the most against the dollar in almost three months after the government said it will use a stronger currency to help slow inflation.
``The reduced expectations for the Fed rate hike certainly will come back to bite the dollar,'' said Todd Elmer, currency strategist at Citigroup Global Markets Inc. in New York. ``The economy won't recover dramatically anytime soon.''
The dollar decreased 0.1 percent to $1.5499 per euro at 9:32 a.m. in New York, from $1.5477 yesterday. The U.S. currency traded at 108.18 yen, compared with 108.22. The yen fell 0.1 percent to 167.65 per euro, from 167.49.
South Korea's won was the biggest gainer versus the U.S. currency, climbing 1.5 percent to 1,023.30 Policy makers will take ``solid'' measures, including favoring a stronger currency, to cool inflation, said Choi Jong Ku, head of the finance ministry's international finance bureau.
Sterling dropped 0.7 percent to $1.9494 and 0.8 percent to 79.46 pence per euro as King predicted will British inflation will exceed 4 percent this year. The rate accelerated to 3.3 percent in May, the highest since at least 1997, the Office for National Statistics said in a report.
Housing Starts
U.S. housing starts dropped to an annual rate of 975,000 in May, from a revised 1.008 million the previous month, the Commerce Department said today in Washington. The median forecast of 72 economists surveyed by Bloomberg News was for a decrease to 980,000 from a previously reported 1.032 million.
Industrial production in the U.S. unexpectedly fell in May. Production in factories, mines and utilities declined 0.2 percent last month after dropping 0.7 percent in April, the Fed reported today in Washington. Economists had forecast industrial production would rise 0.1 percent, according to the median of 68 estimates in a Bloomberg News survey.
The dollar weakened against the euro earlier after the Wall Street Journal and the Financial Times reported the U.S. central bank would probably leave borrowing costs unchanged beyond its June policy meeting.
Futures on the Chicago Board of Trade showed a 54 percent chance the Fed will increase the 2 percent target rate for overnight lending between banks by at least a quarter-percentage point at its August meeting, compared with 69 percent odds yesterday. There's a 16 percent chance policy makers will lift the rate to 3 percent by December.
German Confidence
The euro pared gains against the dollar after a report showed investor confidence in Germany fell to a more than 15- year low this month. The Mannheim-based ZEW Center for European Economic Research said its index of investor and analyst expectations fell to minus 52.4, from minus 41.4 in May. A negative reading means pessimists outnumber optimists.
European Central Bank President Jean-Claude Trichet said on June 5 policy makers may raise the 4 percent main refinancing rate next month to curb the fastest inflation in 16 years.
``The ZEW report could encourage euro selling,'' said Akio Shimizu, chief manager of foreign-exchange trading in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's second- largest lender. ``Signs of a weakening economy mean the ECB could reverse course and switch to a monetary easing bias later this year.'' The euro may fall to $1.5430 today, he said.
Producer Prices
Prices paid to U.S. producers rose more than forecast in May as higher fuel and food costs heightened the threat of inflation. The 1.4 percent jump was the biggest gain since November and followed a 0.2 percent increase in April, the Labor Department said today in Washington. So-called core producer prices that exclude fuel and food increased 0.2 percent, matching economists' projections.
The Fed needs to prevent the public's expectation that inflation will accelerate from spurring demands for higher wages, William Poole, former St. Louis Fed President, said today in an interview on Bloomberg Television.
``You want to keep wages behaving,'' he said. Once the public's anticipation of rising prices begins to stoke demands for higher wages, ``the jig is up'' and inflation becomes harder to eradicate.
The public's outlook for annual inflation over five years stood at 3.4 percent in June, up from 2.9 percent the same month last year, according to the Reuters/University of Michigan Survey.
Poole also spoke out against Fed intervention with the value of the dollar. ``The Fed does not have the power to put a floor under the dollar,'' he said. ``I think the Fed should stay clear.''
June 17 (Bloomberg) -- The dollar fell against the euro after a government report showed housing starts dropped in May to a 17-year low, raising speculation the Federal Reserve will delay increasing borrowing costs this year.
The pound weakened versus the euro and the dollar after Bank of England Governor Mervyn King said the path to bringing inflation within the central bank's target is ``uncertain.'' South Korea's won rose the most against the dollar in almost three months after the government said it will use a stronger currency to help slow inflation.
``The reduced expectations for the Fed rate hike certainly will come back to bite the dollar,'' said Todd Elmer, currency strategist at Citigroup Global Markets Inc. in New York. ``The economy won't recover dramatically anytime soon.''
The dollar decreased 0.1 percent to $1.5499 per euro at 9:32 a.m. in New York, from $1.5477 yesterday. The U.S. currency traded at 108.18 yen, compared with 108.22. The yen fell 0.1 percent to 167.65 per euro, from 167.49.
South Korea's won was the biggest gainer versus the U.S. currency, climbing 1.5 percent to 1,023.30 Policy makers will take ``solid'' measures, including favoring a stronger currency, to cool inflation, said Choi Jong Ku, head of the finance ministry's international finance bureau.
Sterling dropped 0.7 percent to $1.9494 and 0.8 percent to 79.46 pence per euro as King predicted will British inflation will exceed 4 percent this year. The rate accelerated to 3.3 percent in May, the highest since at least 1997, the Office for National Statistics said in a report.
Housing Starts
U.S. housing starts dropped to an annual rate of 975,000 in May, from a revised 1.008 million the previous month, the Commerce Department said today in Washington. The median forecast of 72 economists surveyed by Bloomberg News was for a decrease to 980,000 from a previously reported 1.032 million.
Industrial production in the U.S. unexpectedly fell in May. Production in factories, mines and utilities declined 0.2 percent last month after dropping 0.7 percent in April, the Fed reported today in Washington. Economists had forecast industrial production would rise 0.1 percent, according to the median of 68 estimates in a Bloomberg News survey.
The dollar weakened against the euro earlier after the Wall Street Journal and the Financial Times reported the U.S. central bank would probably leave borrowing costs unchanged beyond its June policy meeting.
Futures on the Chicago Board of Trade showed a 54 percent chance the Fed will increase the 2 percent target rate for overnight lending between banks by at least a quarter-percentage point at its August meeting, compared with 69 percent odds yesterday. There's a 16 percent chance policy makers will lift the rate to 3 percent by December.
German Confidence
The euro pared gains against the dollar after a report showed investor confidence in Germany fell to a more than 15- year low this month. The Mannheim-based ZEW Center for European Economic Research said its index of investor and analyst expectations fell to minus 52.4, from minus 41.4 in May. A negative reading means pessimists outnumber optimists.
European Central Bank President Jean-Claude Trichet said on June 5 policy makers may raise the 4 percent main refinancing rate next month to curb the fastest inflation in 16 years.
``The ZEW report could encourage euro selling,'' said Akio Shimizu, chief manager of foreign-exchange trading in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's second- largest lender. ``Signs of a weakening economy mean the ECB could reverse course and switch to a monetary easing bias later this year.'' The euro may fall to $1.5430 today, he said.
Producer Prices
Prices paid to U.S. producers rose more than forecast in May as higher fuel and food costs heightened the threat of inflation. The 1.4 percent jump was the biggest gain since November and followed a 0.2 percent increase in April, the Labor Department said today in Washington. So-called core producer prices that exclude fuel and food increased 0.2 percent, matching economists' projections.
The Fed needs to prevent the public's expectation that inflation will accelerate from spurring demands for higher wages, William Poole, former St. Louis Fed President, said today in an interview on Bloomberg Television.
``You want to keep wages behaving,'' he said. Once the public's anticipation of rising prices begins to stoke demands for higher wages, ``the jig is up'' and inflation becomes harder to eradicate.
The public's outlook for annual inflation over five years stood at 3.4 percent in June, up from 2.9 percent the same month last year, according to the Reuters/University of Michigan Survey.
Poole also spoke out against Fed intervention with the value of the dollar. ``The Fed does not have the power to put a floor under the dollar,'' he said. ``I think the Fed should stay clear.''
2:08 AM
The Dollar
USD Supported by Rate Hike Expectations
by Korman Tam
6/16/2008 2:30:00 PM
The greenback maintained its buoyant tone against the majors at the start of the week, rallying to a fresh 3 ½-month high versus the yen at 108.56 and 1.5348 against the euro. Despite US Treasury Secretary Hank Paulson continuing to talk up the dollar at the meeting, there was no official mention of currencies in the communiqué from the G8 Finance Ministers meeting. Further, there was also no discussion of possible coordinated intervention to prop up the dollar. The primary issue of concern at the meeting was tackling sharp rises in global inflation, particularly rapid increases in the prices for commodities and oil. Nonetheless, the dollar managed to shrug off the lack of mention at the meeting and continues to hold onto its gains.
Economic data released earlier in the session saw the June NY Fed manufacturing survey contract by more than anticipated at minus 8.68, versus expectations for an improvement to minus 2 from minus 3.23 in May. Meanwhile, the April TICS data revealed net capital inflows increasing to $60.6 billion, a sharp reversal from net sales of $48.2 billion in the previous month. The NAHB housing market index fell to 18 in June, down slightly from a reading of 19 in May.
The coming week will see several key economic reports from the US including May PPI, Q1 current account balance, May housing starts, industrial production, capacity utilization, June Philadelphia Fed manufacturing survey, and May leading economic indicators. Inflation is seen creeping higher with PPI expected to edge up to 0.8% in May from .2% a month earlier, while the excluding food and energy PPI is expected to ease to 0.2% from 0.4%. Housing starts are expected to remain weak, at 980k in May and down from 1.03million units from April.
by Korman Tam
6/16/2008 2:30:00 PM
The greenback maintained its buoyant tone against the majors at the start of the week, rallying to a fresh 3 ½-month high versus the yen at 108.56 and 1.5348 against the euro. Despite US Treasury Secretary Hank Paulson continuing to talk up the dollar at the meeting, there was no official mention of currencies in the communiqué from the G8 Finance Ministers meeting. Further, there was also no discussion of possible coordinated intervention to prop up the dollar. The primary issue of concern at the meeting was tackling sharp rises in global inflation, particularly rapid increases in the prices for commodities and oil. Nonetheless, the dollar managed to shrug off the lack of mention at the meeting and continues to hold onto its gains.
Economic data released earlier in the session saw the June NY Fed manufacturing survey contract by more than anticipated at minus 8.68, versus expectations for an improvement to minus 2 from minus 3.23 in May. Meanwhile, the April TICS data revealed net capital inflows increasing to $60.6 billion, a sharp reversal from net sales of $48.2 billion in the previous month. The NAHB housing market index fell to 18 in June, down slightly from a reading of 19 in May.
The coming week will see several key economic reports from the US including May PPI, Q1 current account balance, May housing starts, industrial production, capacity utilization, June Philadelphia Fed manufacturing survey, and May leading economic indicators. Inflation is seen creeping higher with PPI expected to edge up to 0.8% in May from .2% a month earlier, while the excluding food and energy PPI is expected to ease to 0.2% from 0.4%. Housing starts are expected to remain weak, at 980k in May and down from 1.03million units from April.
11:15 AM
GBPJPY
GBPJPY
SHORT position at 212.18
STOP LOSS above 212.68 (- 50 pips).
THE TARGETS are 211.88 / 211.40
OP, SL & TP at your own risks
SHORT position at 212.18
STOP LOSS above 212.68 (- 50 pips).
THE TARGETS are 211.88 / 211.40
OP, SL & TP at your own risks
4:25 PM
UPDATED SIGNALS : GBPJPY
GBPJPY
LONG position at 211.50
STOP LOSS below 210.50 (-100 pips).
THE TARGETS are 212.10/ 212.38 / 212.74
LONG position at 211.50
STOP LOSS below 210.50 (-100 pips).
THE TARGETS are 212.10/ 212.38 / 212.74
1:20 PM
GBPJPY
GBPJPY
LONG position at 211.08
STOP LOSS below 210.58 (-50 pips).
THE TARGETS are 211.28/ 211.58
OP, SL & TP at your own risks
LONG position at 211.08
STOP LOSS below 210.58 (-50 pips).
THE TARGETS are 211.28/ 211.58
OP, SL & TP at your own risks
12:28 AM
GBPJPY TARGET : 214.00
GBP JPY is in a consolidation after the last bullish movement. There is an horizontal range between 209.60 and 210.20. Support and resistance are given by Bollinger bands. The volatility is low. Bollinger bands are flat. The consolidation should continue. The price should continue to move in Bollinger bands. If the resistance is broken then the target will be 214.00.
Lookout for a break of resistance to take a long position.
GBPJPY
LONG position at 210.20
STOP LOSS below 209.20 (-100 pips)
THE TARGETS are 210.60/ 210.88/ 211.22
OP, SL & TP at your own risks
2:03 PM
GBPUSD:UK Claimant Count Change and Average Earnings +Bonus.
UK Claimant Count Change and Average Earnings +Bonus.
It seems that the Claimant Count Change might be more in focus.
BUY
If it comes out at 3K or lower, I would buy GBP/USD for 40 pips.
SELL
If it comes out at 13K or higher, I would sell GBP/USD for 40 pips.
It seems that the Claimant Count Change might be more in focus.
BUY
If it comes out at 3K or lower, I would buy GBP/USD for 40 pips.
SELL
If it comes out at 13K or higher, I would sell GBP/USD for 40 pips.
12:33 PM
Dollar Rallies on Bernanke
Dollar Rallies on Bernanke
by Korman Tam
6/10/2008 2:50:00 PM
Jawboning in recent sessions has propped the greenback sharply higher across the board, with the currency hovering near 107.40 against the yen and 1.5450 versus the euro. The verbal intervention of late consisted of commentary from Fed officials and US Treasury Secretary Paulson, which strongly benefited the dollar in tempering expectations for a continued policy of benign neglect in the currency's steep declines.
With the G8 Finance Ministers meeting looming, traders will focus closely on any comments hinting at the possibility of concerted intervention by the global central banks. Although intervention remains highly improbable, US Treasury Secretary Paulson yesterday kept that option open if necessary. Paulson addressed the issue of China's currency today, saying although he believes China needs to allow its currency to strengthen more rapidly, it was not ready for a market determined currency. He also said the dollar should not be the scapegoat for record level oil prices. Meanwhile, US Under Secretary of International Affairs McCormick said no formal discussion of currencies is expected at the G8 meeting this upcoming weekend, but it will likely be mentioned at the meeting. He said that currencies have played a "minor role" in the recent spike in oil prices. McCormick expects it to take some time to work through housing market and capital markets issues, but sees growth to accelerate in the US before year-end.
Fed Chairman Bernanke, in a speech given late Monday evening, all but confirmed that the FOMC will leave policy unchanged barring any unexpected shocks to the financial system with the dangers to a "substantial downturn" in the economy having subsided somewhat and burgeoning upside risks to inflation. Bernanke said "the FOMC will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as inflation". Dallas Fed President Fisher echoed a similar tone today, saying the downside risks facing the US are not as severe as initially feared but will need time to recover. Fisher said the Fed is cognizant of the negative currency feedback loop and that a weaker dollar can lead to further inflationary pressures, which weaken the dollar further. He said that recent survey signals on inflation expectations have not been positive and will not tolerate fuelling inflationary expectations.
by Korman Tam
6/10/2008 2:50:00 PM
Jawboning in recent sessions has propped the greenback sharply higher across the board, with the currency hovering near 107.40 against the yen and 1.5450 versus the euro. The verbal intervention of late consisted of commentary from Fed officials and US Treasury Secretary Paulson, which strongly benefited the dollar in tempering expectations for a continued policy of benign neglect in the currency's steep declines.
With the G8 Finance Ministers meeting looming, traders will focus closely on any comments hinting at the possibility of concerted intervention by the global central banks. Although intervention remains highly improbable, US Treasury Secretary Paulson yesterday kept that option open if necessary. Paulson addressed the issue of China's currency today, saying although he believes China needs to allow its currency to strengthen more rapidly, it was not ready for a market determined currency. He also said the dollar should not be the scapegoat for record level oil prices. Meanwhile, US Under Secretary of International Affairs McCormick said no formal discussion of currencies is expected at the G8 meeting this upcoming weekend, but it will likely be mentioned at the meeting. He said that currencies have played a "minor role" in the recent spike in oil prices. McCormick expects it to take some time to work through housing market and capital markets issues, but sees growth to accelerate in the US before year-end.
Fed Chairman Bernanke, in a speech given late Monday evening, all but confirmed that the FOMC will leave policy unchanged barring any unexpected shocks to the financial system with the dangers to a "substantial downturn" in the economy having subsided somewhat and burgeoning upside risks to inflation. Bernanke said "the FOMC will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as inflation". Dallas Fed President Fisher echoed a similar tone today, saying the downside risks facing the US are not as severe as initially feared but will need time to recover. Fisher said the Fed is cognizant of the negative currency feedback loop and that a weaker dollar can lead to further inflationary pressures, which weaken the dollar further. He said that recent survey signals on inflation expectations have not been positive and will not tolerate fuelling inflationary expectations.
2:37 PM
GBPJPY
GBPJPY
SHORT position at 210.10
STOP LOSS above 211.10 (-100 pips).
THE TARGETS are 209.80 / 209.48 / 209.12
OP, SL & TP at your own risks
SHORT position at 210.10
STOP LOSS above 211.10 (-100 pips).
THE TARGETS are 209.80 / 209.48 / 209.12
OP, SL & TP at your own risks
10:04 AM
6:22 PM
NON FARM PAYROLL
U.S. Non-Farm Payroll.
USDJPY
Expected : (-60K ).
Buy : If ( -10K or > ), for 50 pips.
Sell : If ( -100K or > ), for 50 pips.
USDJPY
Expected : (-60K ).
Buy : If ( -10K or > ), for 50 pips.
Sell : If ( -100K or > ), for 50 pips.
7:34 AM
BOE Interests Rate Statement
U.K. Pound Falls Versus Euro as BOE Holds Key Rate at 5 Percent
June 5 (Bloomberg) -- The pound fell against the euro after accelerating inflation prevented the Bank of England from cutting interest rates to support the economy.
The Monetary Policy Committee, led by Governor Mervyn King, held its main rate at 5 percent today as forecast in a Bloomberg News survey, even after the country's biggest mortgage lender said house prices dropped the most in 15 years in May. It extended losses versus the euro as European Central Bank President Jean-Claude Trichet suggested borrowing costs may be lifted next month to quell price growth.
``Sterling has gone to hell in a handbag,'' David Bloom, London-based global head of currency strategy at HSBC Plc, Europe's biggest bank by market value, said in a Bloomberg Television interview. ``Sell it against anything that you have. Sell it across the board. Sterling is going down.''
The pound dropped to 79.54 pence per euro, the lowest level since May 28, and was at 79.47 pence by 3:25 p.m. in London, from 78.94 yesterday. It was also at $1.9552, from $1.9556 yesterday, after slipping to as low as $1.9462.
The U.K. central bank's rate-setting committee didn't publish a statement after today's decision, which was predicted by all 60 economists surveyed by Bloomberg. Policy makers voted 8 to 1 to keep rates on hold at last month's meeting as record-high oil prices and spiraling food costs stoked inflation. Consumer- price growth held above the bank's 2 percent target for the seven months through April, government data show.
Trichet on Rates
The ECB also kept its refinancing rate at 4 percent today, as predicted in a separate Bloomberg survey.
Still, Trichet said in Frankfurt today the region's main rate may be increased next month as risks to price stability in the region ``have increased further.''
U.K. policy makers last cut borrowing costs in April to try and prevent a slowdown in the real-estate market and a credit squeeze from harming the wider economy.
Gilts followed German bunds lower after Trichet's remarks. The yield on the U.K.'s two-year note, most sensitive to the interest-rate outlook, rose 13 basis points to 5.03 percent. The price of the 4.75 percent security due June 2010 fell 0.24, or 2.4 pounds per 1,000-pound ($1,949) face amount, to 99.47. The 10-year gilt yield climbed 8 basis points to 5.04 percent. Yields move inversely to bond prices.
``Gilts are following U.S. Treasuries and German bunds lower,'' said Peter Schaffrik, a fixed-income strategist at Dresdner Kleinwort in London. ``We believe the U.K. economy will slow down enough to bring down price pressures and interest rates. But at the moment inflation remains a key issue.''
`Forced to Cut'
U.K. government debt may reverse its declines on speculation a waning economy will force the central bank to lower borrowing costs later in the year. Economists in a Bloomberg survey predict the central bank will cut its benchmark rate to 4.50 percent by the end of this year.
``We still have a preference for shorter-dated gilts,'' said David Scammell, a money manager in London at Schroders Investment Management Ltd. which has about $19.5 billion in assets. ``We think the Bank of England will be forced to cut rates'' in 2008, he said.
HBOS Plc said today the cost of an average home slipped 3.8 percent from a year earlier, the most since April 1993. Shares in Bradford & Bingley Plc, the U.K.'s biggest home-loan provider to landlords, fell the most since the bank went public in 2000 on June 2 after it reported rising loan arrears.
Inflation `Worries'
``Everything is coming together at the wrong time for the pound,'' said Geoffrey Yu, a Zurich-based currency strategist at UBS AG, Switzerland's largest lender, who forecasts the currency will drop to $1.88 and 80 pence per euro by the end of June. ``The mortgage market is highly exposed and there are worries about inflation. The U.K. bank may have to stay on hold until the end of the year.''
The pound has fallen against 14 of the 16 most-traded currencies since Dec. 6, when the Bank of England started lowering its main rate, from a 6 1/2-year high of 5.75 percent. It has dropped 10 percent versus the euro and 4 percent against the dollar in that time.
The ECB has held its main rate at a more than six-year high of 4 percent since June, while the Federal Reserve has lowered its target rate for overnight loans between banks seven times since September, to 2 percent.
``Inflation rates have risen significantly since the autumn of last year owing mainly to strong increases in energy and food prices,'' said Trichet at a press conference to explain today's decision.
Expectations for inflation in Europe's second-biggest economy today rose to the highest in 8 1/2 years, according to the spread between the 10-year gilt and its index-linked counterpart. The so-called breakeven rate, a gauge of bond traders' views on whether price-growth will quicken or slow, climbed to 3.75 percent, from 3.48 percent before the Bank of England's last interest-rate announcement on May 8.
June 5 (Bloomberg) -- The pound fell against the euro after accelerating inflation prevented the Bank of England from cutting interest rates to support the economy.
The Monetary Policy Committee, led by Governor Mervyn King, held its main rate at 5 percent today as forecast in a Bloomberg News survey, even after the country's biggest mortgage lender said house prices dropped the most in 15 years in May. It extended losses versus the euro as European Central Bank President Jean-Claude Trichet suggested borrowing costs may be lifted next month to quell price growth.
``Sterling has gone to hell in a handbag,'' David Bloom, London-based global head of currency strategy at HSBC Plc, Europe's biggest bank by market value, said in a Bloomberg Television interview. ``Sell it against anything that you have. Sell it across the board. Sterling is going down.''
The pound dropped to 79.54 pence per euro, the lowest level since May 28, and was at 79.47 pence by 3:25 p.m. in London, from 78.94 yesterday. It was also at $1.9552, from $1.9556 yesterday, after slipping to as low as $1.9462.
The U.K. central bank's rate-setting committee didn't publish a statement after today's decision, which was predicted by all 60 economists surveyed by Bloomberg. Policy makers voted 8 to 1 to keep rates on hold at last month's meeting as record-high oil prices and spiraling food costs stoked inflation. Consumer- price growth held above the bank's 2 percent target for the seven months through April, government data show.
Trichet on Rates
The ECB also kept its refinancing rate at 4 percent today, as predicted in a separate Bloomberg survey.
Still, Trichet said in Frankfurt today the region's main rate may be increased next month as risks to price stability in the region ``have increased further.''
U.K. policy makers last cut borrowing costs in April to try and prevent a slowdown in the real-estate market and a credit squeeze from harming the wider economy.
Gilts followed German bunds lower after Trichet's remarks. The yield on the U.K.'s two-year note, most sensitive to the interest-rate outlook, rose 13 basis points to 5.03 percent. The price of the 4.75 percent security due June 2010 fell 0.24, or 2.4 pounds per 1,000-pound ($1,949) face amount, to 99.47. The 10-year gilt yield climbed 8 basis points to 5.04 percent. Yields move inversely to bond prices.
``Gilts are following U.S. Treasuries and German bunds lower,'' said Peter Schaffrik, a fixed-income strategist at Dresdner Kleinwort in London. ``We believe the U.K. economy will slow down enough to bring down price pressures and interest rates. But at the moment inflation remains a key issue.''
`Forced to Cut'
U.K. government debt may reverse its declines on speculation a waning economy will force the central bank to lower borrowing costs later in the year. Economists in a Bloomberg survey predict the central bank will cut its benchmark rate to 4.50 percent by the end of this year.
``We still have a preference for shorter-dated gilts,'' said David Scammell, a money manager in London at Schroders Investment Management Ltd. which has about $19.5 billion in assets. ``We think the Bank of England will be forced to cut rates'' in 2008, he said.
HBOS Plc said today the cost of an average home slipped 3.8 percent from a year earlier, the most since April 1993. Shares in Bradford & Bingley Plc, the U.K.'s biggest home-loan provider to landlords, fell the most since the bank went public in 2000 on June 2 after it reported rising loan arrears.
Inflation `Worries'
``Everything is coming together at the wrong time for the pound,'' said Geoffrey Yu, a Zurich-based currency strategist at UBS AG, Switzerland's largest lender, who forecasts the currency will drop to $1.88 and 80 pence per euro by the end of June. ``The mortgage market is highly exposed and there are worries about inflation. The U.K. bank may have to stay on hold until the end of the year.''
The pound has fallen against 14 of the 16 most-traded currencies since Dec. 6, when the Bank of England started lowering its main rate, from a 6 1/2-year high of 5.75 percent. It has dropped 10 percent versus the euro and 4 percent against the dollar in that time.
The ECB has held its main rate at a more than six-year high of 4 percent since June, while the Federal Reserve has lowered its target rate for overnight loans between banks seven times since September, to 2 percent.
``Inflation rates have risen significantly since the autumn of last year owing mainly to strong increases in energy and food prices,'' said Trichet at a press conference to explain today's decision.
Expectations for inflation in Europe's second-biggest economy today rose to the highest in 8 1/2 years, according to the spread between the 10-year gilt and its index-linked counterpart. The so-called breakeven rate, a gauge of bond traders' views on whether price-growth will quicken or slow, climbed to 3.75 percent, from 3.48 percent before the Bank of England's last interest-rate announcement on May 8.
10:40 PM
5:21 PM
4:20 PM
4:15 PM
SELL GBPUSD
GBPUSD
SHORT position at 1.9510
STOP LOSS above 1.9560 (-50 pips).
THE TARGETS are 1.9450/ 1.9400
OP, SL & TP at your own risks
SHORT position at 1.9510
STOP LOSS above 1.9560 (-50 pips).
THE TARGETS are 1.9450/ 1.9400
OP, SL & TP at your own risks
12:06 PM
11:35 AM
GBPJPY TODAY
GBPJPY is in consolidation. Move in a range between 205.00 - 206.86. It is being supported at 205.00. If the support is broken the target will be 203.00
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