Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

GBP/EUR The Currency Pair to Watch for in 2014?

Currencies / British Pound Jan 12, 2014 - 06:03 AM GMT

By: Submissions


Liron Levy writes: It is crystal clear that employment is the economic sector that appears to drive the currency exchange market.  No country or economic zone is today boasting that they are out of the woods as to the 2008 global recession.  However, the GBP is benefiting from current figures that continue to confirm a strong ongoing improvement in the employment sector.  The jobs picture in the UK exhibits falling unemployment, along with a seventh consecutive month of healthy increases in hiring. 

The primary sectors covered in Markit’s Purchasing Managers Index (PMI) are comprised of employment, manufacturing, construction and services.  In the UK, manufacturing output registered a slightly larger drop than predicted.  The third quarter 2013 Manufacturing PMI recorded 58.1, the peak since 2010.  That score dropped to 57.3 for the fourth quarter.  The sunnier side of the British manufacturing photo, however, shows new orders reaching a 21-year high, coupled with a rise in new jobs that tops the charts when reviewing the past 2.5 years. 

The GBP and the EUR

Bolstering the forex investment in the upward movement of GBP/EUR, is the intimation by the Bank of England (BoE) that once the ongoing drop in unemployment brings that indicator to a threshold of 7.0%, the global community can expect to see a rise in rates.

Viewing the Construction section of the PMI, we see a sector that has come out stronger in the fourth quarter than was previously forecast.  The expectation was a drop to 62.0 from the third quarter 62.2.  The reality was a midpoint level of 62.1 by the year’s end.

As is often the case, the PMI presented a three-dimensional configuration of the financial outlook for the U.K.  A huge portion, 70% in fact, of the GDP of Britain is ensconced in the service sector.  The fourth quarter brought this major sector to 58.8, the lowest reading since July 2013.  At least 60.0 was expected.  In spite of the surprising dip in the service sector, the elevated level of the GBP has continued unabated, as investors look to the solid 5.3% improvement in the GBP over the entirety of 2013.

Inflationary Fears Put the Skids On

The picture of the British monetary framework must include a look at inflation.  The rise in the wage structure is not keeping pace with inflation, though individual spending remains alive and well.  The strength of the Gross Domestic Product is dependent upon the inclination to spend.  Economists who are optimistic as to the sustained economic revival of the U.K., expect an increase in wages to result from a corporate growth-oriented outlook. 

Gaining a perspective as to the economic situation of continental Europe, the pervading view is one of a monetary zone that continues to struggle.  The price-rise indicator of financial health was a dismal one-month drop from 0.9% to 0.7%.  Deflation, translated as a decrease in overall retail prices, is avoided like the plague by each country.  Accompanying this drop from November to the close of December is a rise in the regional debt of Europe.  The result of this duality is a statement by the European Central Bank that interest rates, currently at their lowest record of 0.25%, may drop even lower.

It is the establishment of new jobs, chasing a seven-year high, that ultimately carries the day, as the GBP/EUR currently continues to register over 1.20.  Additionally, the prediction of a higher rate by the BoE as unemployment falls, coupled with the negative data emanating from Europe, create a solid GBP/EUR performance. It’s looking solid for the sterling, and forecasts certainly point in that direction.      

This article was contributed by is a leading UK financial website that reviews and compares top UK CFD brokers.

Copyright © 2014 Liron Levy - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules