EUR/USD 1.16070
-0.006%
Gold 4606.86
-0.199%
Oil 59.061
-0.107%
USD/JPY 158.546
-0.042%
GBP/USD 1.33809
-0.009%
GBP/JPY 212.153
-0.041%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On January 16, CICC Research Report stated that this "structural interest rate cut" is mainly structural, and does not mean that there will be a traditional "interest rate cut" immediately afterward. At the press conference, the central bank usually announces a total reduction in reserve requirements and interest rates and an adjustment of structural monetary policy at the same time, such as in May last year [2]. At this press conference, the central bank mainly announced the interest rate cut of structural monetary policy tools, and did not announce the traditional reduction in reserve requirements and interest rates. At the same time, the central bank pointed out at the press conference that "Chinas price level has recently shown positive changes, and the coordination effect of Chinas macro policies is also constantly strengthening." Based on this information, we tend to believe that this policy adjustment is mainly structural, while the overall tone remains generally loose. After the information was released, treasury bond futures rose slightly and then fell back. Our calculated policy interest rate expectation index shows that the current interest rate cut expectation is generally stable, and the expectation for interest rate cuts throughout 2026 is about 10bp.Mitsubishi UFJ: Mitsubishi UFJ Americas Securities has been designated a primary dealer by the Federal Reserve Bank of New York.According to Futures News on January 16, the holdings of the worlds largest gold ETF, SPDR Gold Trust, increased by 0.57 tons from the previous day, and the current holdings are 1074.8 tons.According to Futures News on January 16, the holdings of the worlds largest silver ETF, iShares Silver Trust, decreased by 180.44 tons from the previous day, with the current holdings at 16,061.78 tons.Petrobras, Brazils state-owned oil company, projected total oil and gas production of 2.99 million barrels of oil equivalent per day by 2025, also exceeding its target.

GBP/USD falls to around 1.2370 as the BoE considers taking swift action ahead of UK inflation and US purchasing managers' indices

Alina Haynes

Apr 17, 2023 13:53

 GBP:USD.png

 

On Monday morning, the GBP/USD currency pair retested an intraday low of 1.2390 after extending Sunday's decline from a 10-month high. To provoke adverse after breaking a four-week uptrend, the Cable pair explains the most recent concerns emanating from the United Kingdom (UK) and the optimism surrounding the Federal Reserve (Fed).

 

According to the Financial Times (FT), "The Bank of England is considering a major overhaul of its deposit guarantee scheme, including increasing the amount covered for businesses and compelling banks to pre-fund the system to a greater extent to ensure faster access to cash when a lender collapses."  The revelation fuels banking concerns in the United Kingdom and places pressure on the Cable duo.

 

UK Chancellor Jeremy Hunt's concerns about US subsidies may also be exerting downward pressure on the GBP/USD exchange rate as British firms rush to claim benefits before leaving the country. According to the news, "Chancellor Jeremy Hunt warned Sky News that Britain should be wary of any new subsidies, warning that they could undermine the economy and possibly even spark a protectionist trade war."

 

A larger-than-expected decline in US retail sales was unable to offset positive data from US industrial production and the University of Michigan's (UoM) consumer confidence index from the previous day. Despite this, US retail sales decreased by 1.0% in March compared to the predicted -0.4% decline and February's -0.2% decline. As opposed to the 0.2% market consensus and previous reading, Industrial Production increased by 0.4% in the month in question. The preliminary result of the University of Michigan's (UoM) Consumer Confidence Index for April, which increased to 63.5 from 62.0 analysts' expectations and previous readings, was also encouraging. In addition, inflation forecasts for the next year increased from 3.6% in March to 4.6% in April, while inflation forecasts for the next five years decreased by 2.9% during the same month.

 

Notably, Fed officials have recently appeared more hawkish than their BoE counterparts, which has exerted additional pressure on the GBP/USD exchange rate.

 

In this environment, the S&P 500 Futures exhibit modest gains following Wall Street's pessimistic close, while bond yields remain unchanged following weekly increases.

 

Moving forward, the current week is crucial for GBP/USD speculators as it contains a variety of high-quality inflation, employment, and UK PMI data. These data may be used to support the Bank of England's (BoE) officials' waning hawkish inclination and may keep bears in play. However, the US PMIs and Fed discussions should not be disregarded when looking for clear guidelines.

Suggestion