The declining rate debate

October 14, 2015

At the start of the year the debate was centred on when the major central banks (principally the UK and US) would start raising interest rates, despite the fact that many central banks were easing. But the reality has proven to be very different. There has been a second Fed governor yesterday saying that the Fed should not raise interest rates this year (Tarullo) and the market views this as the more likely outcome from the two remaining Fed meetings of the year. With headline inflation having fallen below zero yesterday, the UK is in even less of a hurry to increase rates, with the focus today on the labour market data, where some signs of slowing have been seen of late. Sterling saw more weakness against the resurgent single currency yesterday, EURGBP moving up to levels last seen early Feb of this year. The bottom line is that the interest rate story is becoming less relevant for the major currencies and is also reducing overall volatility.

Elsewhere the Aussie has continued to weaken overnight on the back of the recent strong rally, briefly down to the 0.72 level. Australia’s second large bank (Westpac) increased mortgage rates overnight combined in a capital raising package, which did put some downward pressure on the currency given the risk that other bank follow through on this and make an interest rate cut from the central bank a bit more likely at the margins. We’ve also had comments from New Zealand central bank head Wheeler, again re-iterating the scope for a further interest rate cut should conditions allow. The kiwi was initially weaker on the news, but managed to recover losses towards the end of the Asia session.

Publication source
FxPro information  FxPro reviews

September 29, 2016
OPEC blinks
Yesterday decision by OPEC to restrict oil supply has pushed the price of crude higher by some 5%. The move took the markets by surprise, with the divisions between Iran (who are still enjoying their return to global markets)...
September 29, 2016
Gold weighed down by US data
The gold price is down for a second straight day today as investors await a raft of data from the US this week which may decide the question of an interest rate hike...
September 29, 2016
Informal OPEC meeting seizes limelight
Global stocks were chaotic on Tuesday with most equities vibrating between losses and gains as the mixture of anticipation ahead of OPEC - informal meeting and ongoing discussions over the results of the first presidential debate created explosive levels of volatility...

Larson&Holz IT Ltd Rating
Grand Capital Rating
FBS Rating
HotForex Rating
FOREX.com Rating
Vantage FX Rating

IQ Option Rating
TropicalTrade Rating
24option Rating
OptionTrade Rating
Banc De Binary Rating
TopOption Rating