Soft UK CPI sparks Sterling selloff

16 November, 2016

Sterling was exposed to downside pressures on Tuesday following the unexpected decline in October’s inflation figures which offered a fresh opportunity for bearish investors to send the GBPUSD lower. Consumer price growth in the UK receded back to 0.9% last month; falling short of the 1.1% expectations with smaller price hikes in clothing and university fees acting as the biggest drag. Although this instance of cooling inflation could alleviate some pressures enforced onto the Bank of England, Sterling weakness amid the Brexit woes may ensure UK inflation to continue its positive trajectory in the New Year. The pound remains haunted by the ongoing Brexit fears with the noticeable price vulnerability attracting sellers to drag the GBPUSD towards 1.2200.

Investors may direct their attention towards the Inflation report hearing where BoE Governor Mark Carney appears before Parliament’s Treasury Committee. Discussion revolving around the ongoing Brexit developments, inflation forecasts for the New Year, economic outlooks and Carney’s term in the office could inject the sensitive Sterling with additional levels of volatility.

US Retail sales in focus

The Greenback was a star performer across the currency markets on Monday as the combination of inflated US rate hike expectations and optimism over rising economic growth in the States under Trump’s administration enticed bullish investors to attack. Sentiment is firmly bullish towards the Dollar with the Dollar Index hovering around 11 month highs as speculators add bets over the Federal Reserve raising US interest rates in December. Much attention may be directed towards October’s retail sales figure which if exceeds expectations could play a key chess piece ahead of December’s Fed policy meeting. From a technical standpoint, Dollar bulls remain in full control with a breakout above 100.00 on the Dollar Index opening a path higher towards 100.50.

Commodity spotlight – Gold

Gold commenced the trading week on a shaky footing with prices tumbling towards $1210 as the mixture of Dollar strength and mounting US rate hike expectations soured investor attraction towards the zero yielding metal. The weekly close below $1250 sealed the deal for Gold bears with further declines expected in the future as the unexpected Trump effect encourages sellers to install repeated rounds of selling. With the Fed futures pointing to a 90% probability of a US interest rate increase in December, Gold is caged with any appreciations considered as a technical bounce for a steeper decline lower towards $1200. From a technical standpoint, the metal may be in the process of a technical bounce with the $1250 resistance attractive to sellers.

Source link  
Earnings vs. Interest Rates: who wins?

Global equity markets failed to resume any kind of strong rebound following Tuesday's surge. Asian equity indices are deep in the red today...

Dollar lifted by hawkish Fed minutes

Dollar bulls were back in action on Wednesday evening after minutes from the Federal Reserve's September meeting reinforced expectations...

Yuan firms on Dollar weakness

Global investors will likely remain on high alert throughout the end of the week to see if the largest market sell-off since early 2018 will...

EM currency weakness refuses to go away

Tuesday has seen stability in Chinese markets following a very nervous beginning to the new trading week yesterday. Signs of China market stability...

Yuan eases on risk-off sentiment

Financial markets have entered the new trading week on negative footing as a mixture of different market themes weigh on investor sentiment...

Risk assets under pressure from rates

Chinese equities took a big hit after traders returned from a week-long holiday. Efforts by the People's Bank of China to free more than $100 billion...

U.S. Treasury Yields boost the greenback

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets. This time it wasn't only the rate-sensitive two-year yields that marched higher...

NAFTA deal fails to lift global risk appetite

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty...

Dollar steady after Fed raises rates

In a widely expected move, the Federal Reserve has raised its key interest rate by 25 basis points for the third time this year. The central bank...

In the past 24 hours Bitcoin has lost -0.44% and reached $6452.75522737. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.6352% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 2.64% and is now at $203.243682987. Have the most popular cryptocurrencies compared online 24/7.

Top Brokers offering Forex Market Analysis

Forex Currencies Forecasts

Top 10 Forex Brokers 2018

# Broker Review
6FIBO GroupFIBO Group84%