We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Crude Oil Prices May Turn Lower as Covid-19 Fears Reemerge - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/07/07/Crude-Oil-Prices-May-Turn-Lower-as-Covid-19-Fears-Reemerge.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #CrudeOil #oott #COVID19
  • Forex trading, which is the act of exchanging fiat currencies, is thought to be centuries old – dating back to the Babylonian period. Learn about the history of Forex here:https://t.co/ePTJlbUP7c https://t.co/bdDrVU9XED
  • 🇮🇹 Retail Sales MoM (MAY) Actual: 25.2% Previous: -10.5% https://www.dailyfx.com/economic-calendar#2020-07-07
  • Chinese gold reserves $110.76bln at the end of June from $108.29bln at the end of May, according to the PBoC
  • EU Commission - Euro Area GDP 2020 forecast at -8.7% (-7.7% previous) - 2021 GDP forecast at 6.1% (6.3% previous)
  • 🇮🇹 Retail Sales MoM (MAY) Actual: 25.2 Previous: -10.5% https://www.dailyfx.com/economic-calendar#2020-07-07
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in US 500 are at opposite extremes with 71.32%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/tjZNp13KdF
  • Heads Up:🇮🇹 Retail Sales MoM (MAY) due at 08:00 GMT (15min) Previous: -10.5% https://www.dailyfx.com/economic-calendar#2020-07-07
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Gold: -0.11% Silver: -0.86% Oil - US Crude: -0.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/lEzwwnbzPY
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here:https://t.co/vg7w10la3j https://t.co/s1hwlaOtlm
British Pound May Rise on Status-Quo Bank of England Inflation Report

British Pound May Rise on Status-Quo Bank of England Inflation Report

2014-08-09 10:42:00
Ilya Spivak, Head Strategist, APAC
Share:
British Pound May Rise on Status-Quo Bank of England Inflation Report

Fundamental Forecast for British Pound: Neutral

  • All Eyes Are on the BOE Quarterly Inflation Report in the Week Ahead
  • British Pound May Correct Higher Absent Major Dovish Rhetoric Shift
  • Help Identify Critical Turning Points for GBP/USD with DailyFX SSI

The outlook for monetary policy continues to be the dominant driver of British Pound price action. Indeed, the correlation between GBPUSD and the UK 2-year Gilt yield – a reflection of investors’ near- to medium-term interest rate outlook – is now at a formidable reading of 0.73 (on rolling 20-day studies).

Last week’s BOE announcement proved to be a non-event, with Governor Mark Carney and company leaving the setting of monetary policy unchanged and publishing no explanatory statement to lay out their reasoning going forward.

The week ahead ought to be more eventful as the central bank unveils its quarterly Inflation Report. The document and the press conference following its publication have served as the primary vehicle for officials to communicate major changes in their outlook for the economy and introduce changes into the policy mix.

A shift in strategy this time around is unlikely: February’s re-tooling of the “forward guidance” framework to focus on the loosely-defined objective of reducing spare capacity has arguably left enough space to maneuver for the rate-setting MPC committee such that it can adjust its posture without scrapping the policy regime entirely.

That means investors’ primary points of interest will be any updates to the BOE’s economic forecasts and the tone of its rhetoric. Needless to say, these will be evaluated in an attempt to gauge when the bank might feel comfortable raising interest rates.

The markets’ hawkish policy outlook moderated significantly in July, with GBPUSD marching lower alongside front-end yields to break its 2014 uptrend and finish last week with the weakest close in two months. As we argued a month ago, that makes sense. UK economic data outcomes have tended to underperform relative to consensus forecasts since February, suggesting that building a hawkish voting majority on the MPC will be a tall order in the near term.

With that in mind, Sterling has now fallen for five consecutive weeks. This suggests that the Inflation Report will probably need to deliver an outsized dovish surprise in to maintain momentum behind the down move. On the other hand, a status-quo outcome may paint the recent selloff as a bit one-sided, opening the door for a corrective bounce.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.