Sterling breather

14 April, 2016

Sterling has been on a slightly better footing over the past week, with EURGBP moving down from the high just above the 0.81 level and cable bouncing from the 1.40 level. But the gains are hardly anything to write home about, especially against the background of the broader dollar weakness against EM currencies and also the Aussie over the same period. Today’s MPC meeting is unlikely to upset the tone, but nevertheless in the wake of the better than expected inflation data this week will be watched for any indications on the outlook for policy ahead. There continues to be a fairly strong split between market pricing and the ‘consensus’ form analysts survey, the latter looking for the first move in rates far earlier than the market. Interest rate differentials have nudged in the favour of sterling over the past week and this suggests further near-term gains are possible for sterling. That said, the potential for further losses in the run-up to the EU referendum remains strong.

Overnight, we’ve seen the Monetary Authority of Singapore effectively eased policy overnight by moving to a more neutral stance on the currency from the previous policy of “modest and gradual” appreciation. Being such a small but open economy, the exchange rate is the main policy tool and this change in stance reflects the weakening expectations surrounding their own economy which is itself a reflection of the more uncertain global environment. We’ve seen other Asian currencies weaken in the wake of the decision by the MAS, based on the fears that this could lead to a round of competitive currency devaluations in the region (e.g. Malaysia). Expect mentions of “currency wars” to increase in the press. Elsewhere for today, we see CPI data released in the US, where the headline rate is seen rising to 1.1%. The dollar is likely to remain cautious.


Source link  
Fed Monetary Policy Report to be released

This report is release twice a year and provides an insight into the conduct of monetary policy and economic developments and prospects for the future for the...

The Pound continues to weaken

Cable (GBPUSD) took a hit yesterday as Boris Johnson resigned from the Cabinet following the earlier decision by David Davis to part ways...

The latest Brexit proposals

The UK's Brexit Secretary David Davis has resigned along with two junior ministers, Steve Baker and Suella Braverman, over PM May's latest softer Brexit proposals...


Some ECB members want earlier rate hike

The markets remain subdued after yesterday's 4th of July celebrations in the US. Despite this Oil headlines are dominating the markets once again. US President Trump...

Gold has played out as a double top

The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now hit the 1240.00...

Gold chart has played out as a double top

The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now reached...


President Xi warns of Full Scale Trade War

Risk on sentiment returned briefly yesterday as markets retraced some of Monday’s selloff but sentiment in Asia has declined overnight. The PBOC cut...

USD extend losses in risk adverse markets

Stock markets fell hard yesterday as trade tensions deepened and the consequences of such action has investors worried. US Company Harley Davidson...

Market participants out of risk assets

Over the weekend President Trump indicated that if trade barriers and tariffs against the US were not removed that he would have no choice but to add further...


In the past 24 hours Bitcoin has gained 1.58% and reached $6374.39. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.7353% and is now at $1.1673. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -8.72% and is now at $450.772. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM88%
3HYCMHYCM86%
4FIBO GroupFIBO Group79%
5FxProFxPro78%
6FXCMFXCM73%
7HotForexHotForex69%
8AvaTradeAvaTrade68%
9XMXM68%
10Alfa-ForexAlfa-Forex66%
  


Share: