News & Analysis at your fingertips.

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
Subscribe
Please try again
EUR/USD
Bullish
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
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • 🇳🇿 Business NZ PMI (MAR) Actual: 63.6 Previous: 53.4 https://www.dailyfx.com/economic-calendar#2021-04-15
  • The US Dollar may extend gains against the Thai Baht. But, its price action within USD/SGD, USD/PHP and USD/IDR seem to be favoring more range-bound trading conditions. Get your market update from @ddubrovskyFX here:https://t.co/DYCLXAFcCr https://t.co/ObnecL3R6u
  • Heads Up:🇳🇿 Business NZ PMI (MAR) due at 22:30 GMT (15min) Previous: 53.4 https://www.dailyfx.com/economic-calendar#2021-04-15
  • For markets, data really only matters to the extent it drives monetary policy bets Did US retail sales absolutely crush estimates? YES Guess what? Odds of a #Fed rate hike by end of 2022 worsened, now about 54% chance vs 90% early April Dovish #Fed comments doing the real work https://t.co/8phPSG9DMe
  • CDC panel tentatively set to meet late next week on Johnson & Johnson vaccine $JNJ $SPX $NDX $RUT $DJI
  • Fed's Mester: - Does not think the Fed being behind the curve is a primary risk - Second half of the year is going to be strong - Growth will be at 6% or higher overall this year
  • Following their rebound from critical trend support at the end of March, gold prices have now broken through multi-week consolidation resistance. Get your $XUUSD market update from @CVecchioFX here:https://t.co/uZtcPEukJ1 https://t.co/qu0PLXwjwJ
  • Silver hit a fresh three-week high above the 25.80 level. The metal had hit its lowest point since December at the end of March, around the 24.00 level. Get your $XAG market update here:https://t.co/hN2TNhCsio https://t.co/z8EqgtQHyX
  • Fed's Mester: - We are going to see inflation stabilize - It may take several months for supply chains to get fixed
  • The S&P 500 waded deeper into record territory this week as the country’s largest banks offered an encouraging read on the US economy and corporate earnings outlook. Get your #equities market update from @PeterHanksFX here:https://t.co/bI2nEziDzV https://t.co/KmexIR7qIn
Critical Week For British Pound Points to Big FX Moves Ahead

Critical Week For British Pound Points to Big FX Moves Ahead

David Rodriguez, Head of Product
Critical Week For British Pound Points to Big FX Moves Ahead

Critical Week For British Pound Points to Big FX Moves Ahead

Fundamental Forecast for GBP: Bearish

The British Pound finished the week marginally higher versus the US Dollar on the heels of stronger-than-expected economic growth numbers. Yet the small rally keeps the Sterling within a tight trading range, and the true test for the GBP will likely come on a highly-anticipated Bank of England interest rate decision due in the coming week.

The weight of expectations is significant as interest rate markets point to a 100% probability the Bank of England will cut interest rates by 25 basis points at their August 4 meeting. This strong conviction ostensibly eliminates much of the guesswork, but there is nonetheless clear uncertainty given the potential for unconventional monetary policy easing. Bank of England Governor Mark Carney has strongly suggested the bank would look to loosen monetary conditions following the UK electorate’s vote to leave the European Union. How the Bank of England ultimately responds to economic headwinds is of critical importance and will almost certainly act as a key driver for on the British Pound.

Economic data heading into the critical Bank of England meeting paints a decidedly mixed picture. On the one hand, UK Gross Domestic Product numbers for the second quarter handily beat expectations and showed the economy headed into the EU Referendum on solid footing. Yet recent consumer confidence numbers showed the largest single-month drop in headline figures since 1981, and the previous week’s industrial survey figures painted a similarly gloomy picture for domestic producers.

The key question becomes whether the Bank of England will proactively produce monetary policy stimulus or wait until hard data confirms a slowdown. Some claim BoE Governor could take a cue from his European Central Bank counterpart who famously said the ECB would do “whatever it takes” to save the Euro in the midst of the Greek debt crisis. Market reactions to the “whatever it takes” speech were significant—the Euro instantly recovered as did regional financial markets. BoE Governor Mark Carney obviously does not have remit nor clear direct interest in the Euro as the UK has never been part of the single currency zone. And yet any statement to this effect on protecting the British economy from “Brexit” fears would likely force a significant reaction.

Hints at aggressive interest rate cuts and/or similarly substantive Quantitative Easing policies would quite likely hurt the GBP but benefit UK financial markets. The threat of inaction is significant, however; the British Pound would likely rally sharply if no new easing measures are introduced.

Broader price trends favor continued GBP weakness and current trader sentiment remains dour. We need only look at recent CFTC Commitment of Traders data as confirmation; large speculative traders are their most net-short GBP/USD futures in over three years. Yet this in itself creates clear risk as any unexpected news could force a significant short-covering rally. This dynamic likely explains a significant jump in the Sterling on Friday afternoon in otherwise quiet market conditions.

That risk of fear-driven GBP strength is only magnified on truly market-moving news; traders should be wary of the potential for outsized reactions to the upcoming Bank of England policy meeting. - DR

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

DISCLOSURES