GBP/USD Below Important Resistance

* The dollar traded mixed in directionless trading Wednesday. Flat US stocks and rising home prices provided only limited support for the more risk-sensitive currencies. The S&P 500 fell 0.51 points to 954.07. The yen rose modestly. The euro declined as eurozone industrial new orders fell more than expected. The Australian dollar fell modestly while Australia’s consumer-price inflation was in line with expectations. The Canadian dollar rose on stronger-than-expected Canadian retail sales.

* The GBP/USD reversed earlier losses after the Bank of England July meeting minutes showed that the Monetary Policy Committee voted unanimously not to expand its quantitative easing policy. There had been speculations of an expansion of the program, but the MPC noted that the downside risks to the UK economy had diminished and inflation was a little higher than expected. Still in an uptrend, the GBP/USD has traded sideways since late-May. The pair failed to break the 1.66-area resistance several times. If this resistance is broken, the GBP/USD will rally again. There are supports from the uptrend in the 1.62 area and at the 1.60 handle.

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Financial and Economic News and Comments

US & Canada

* US home prices unexpectedly increased 0.9% m/m in May after a downwardly revised 0.3% m/m decline in April, according to the Federal Housing Finance Agency’s monthly house price index. May house prices fell 5.6% y/y, the smallest year-on-year decline in 10 months, indicating the house-price decline is abating.

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* Canada’s retail sales climbed a more-than-anticipated 1.2% m/m to C$34.045 billion ($30.8 billion) in May, the fourth increase in five months, after an upwardly revised 0.6% m/m decline in April, figures from Statistics Canada showed. Retail sales rose in seven of eight sectors, led by a 2.4% m/m gain in the automotive sector. May retail sales less autos rose a more-than-expected 0.7% m/m, the first gain in three months, following April’s 0.5% m/m slide. May retail sales fell 4.9% y/y and fell 3.3% y/y excluding autos.

Europe

* Eurozone industrial new orders unexpectedly declined 0.2% m/m in May after an upwardly revised 0.7% m/m decrease in April, according to data from Eurostat. May industrial new orders fell a more-than-anticipated 30.1% y/y, a 10th consecutive decline, following April’s record 35.3% y/y drop.

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* The CBI UK factory orders index declined to -59 in July, the lowest since January 1992, from -51 in June, the Confederation of British Industry reported. The monthly index of export orders increased to -45 from -52 and the quarterly index on export prospects for the coming year improved to -5, the highest since January 2008.

* The Bank of England voted to keep the bank rate at 0.50% and hold its money-printing plan at £125 billion ($205 billion) on signs the UK economic slump has eased, minutes of the July 8-9 BOE Monetary Policy Committee meeting released today showed.

* The UK house-price slump will persist until 2012 and hurt consumer spending, the National Institute of Economic and Social Research said, also predicting that UK GDP will keep declining until Q4 2009.

Asia-Pacific

* Australia’s consumer prices in Q2 2009 rose 0.5% q/q, as forecast, after a 0.1% q/q increase in Q1, CPI data from the Australian Bureau of Statistics showed. The Q2 CPI rise was driven by a 2.3% q/q increase in health costs and a 2.2% q/q advance in prices of household contents and services. The consumer-price inflation rate decelerated to 1.5% y/y, as expected, from Q1’s 2.5% y/y.

* Japanese demand for bank loans declined over the past three months, with the index of demand for loans by businesses falling to -14 in July from 13 in April, according to the July 2009 senior loan officer opinion survey on bank lending practices at large Japanese banks, released by the Bank of Japan.

Источник: Hans Nilsson

22.07.2009