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A senior Bank of Japan official stated that appropriate monetary policy will achieve stable inflation and put the economy on a path of sustainable growth.On July 16, the Office of the United States Trade Representative (USTR) announced that, following instructions from President Trump, US Trade Representative Greer took final action under Section 301 of the Trade Act of 1974, imposing a 25% tariff on certain Brazilian goods. This decision stems from a year-long USTR investigation. The investigation concluded that some of Brazils measures regarding digital trade and electronic payment services, unfair preferential tariffs, anti-corruption enforcement interference, intellectual property protection, ethanol market access, and illegal deforestation were "unreasonable practices" that burdened or restricted the business activities of US farmers, workers, innovative companies, and exporters. Greer stated, "Despite extensive negotiations with Brazil over the past year, these issues remain unresolved. The United States remains committed to continuing negotiations with Brazil to address the long-standing issues identified in this investigation." The US will exempt Brazilian beef and coffee from the new 25% tariffs on Brazilian goods.A senior Bank of Japan official stated that delaying adjustments to stimulus measures could lead to these risks materializing and trigger a future economic downturn, given the current high risk of upward inflation.According to the Nikkei Asian Review, the Japanese government and the ruling Liberal Democratic Party plan to raise the shareholding threshold for holding an extraordinary general meeting of shareholders from the current 3% to more than 5% of the voting rights.The Office of the United States Trade Representative announced that it will impose a 25% tariff on certain goods from Brazil.

Despite the fact that Eurozone interest rates are anticipated to peak sooner, the EUR/GBP looks to have breached over 0.8630

Daniel Rogers

Dec 07, 2022 15:12

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The EUR/GBP pair has had a stronger recovery from 0.8580 during the Asian session, approaching the pivotal 0.8630 level. Despite the European Central Bank (ECB) being close to reaching an interest rate high, there has been strong demand for Euro bulls. Thus, the monetary policy meeting scheduled for next week will be of utmost significance.

 

The cross is attempting to break strongly above the significant barrier of 0.8630 for the fourth time this week. The hawkish remarks made by ECB policymakers are holding back the euro bulls.

 

"There will be another rate hike," said Constantinos Herodotou, governor of the Central Bank of Cyprus, "but we are very near to neutral." The European Central Bank's chief economist, Phillip Lane, is unsure as to whether the inflation peak has already occurred or will take place in 2019. He stated that although "much has already been done," he does not rule out more rate increases.

 

Investors are currently looking forward to Christine Lagarde's speech, which will be revealed on Thursday. The ECB President is likely to lower her inflation projection in her future statement in light of the poor retail sales numbers.

 

In contrast to expectations for a 1.7% loss, this week's Eurozone retail sales numbers showed a 1.8% decline. Aside from that, annual economic data contraction came in at 2.7% as opposed to the 2.6% consensus expectation. A decline in household demand demonstrates the effectiveness of the European Central Bank's (ECB) policy tightening initiatives. To reach their sales targets, firms could feel pressured to lower the prices of their products and services.

 

The United Kingdom's deteriorating food crisis, brought on by growing costs and a labor shortfall, has had an impact on the Pound Sterling. According to Minette Batters, president of the National Farmers Union, "the government and the entire supply chain must act swiftly." The Financial Times stated that "tomorrow might be too late." The economy already faces rising food inflation, and the issue with the supply of food will make matters worse.


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