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On May 26, Liu Xiaoming, Governor of Hainan Province, visited Hainan Data Industry Service Co., Ltd. on May 25 to investigate the construction of cross-border computing power facilities, inspect the online operation of the "Hainan Provincial Computing Power Monitoring and Dispatch Platform," and chair a research symposium. Liu Xiaoming pointed out that it is necessary to focus on green and low-carbon development, deepen the synergy between computing and electricity, promote direct green electricity supply, green electricity substitution, and energy-saving and carbon-reducing transformation, and solidify the energy security foundation for the high-quality development of the computing power industry with a stable, green, inexpensive, and reliable power supply, achieving a virtuous cycle of "strengthening computing with electricity and promoting electricity with computing."According to Fox News: U.S. Central Command says the U.S. strike operation has temporarily ended.On May 26, the Russian Foreign Ministry website published a statement on May 25 saying that Russian Foreign Minister Sergey Lavrov spoke by phone with US Secretary of State Marco Rubio that day. Following instructions from Russian President Vladimir Putin, Lavrov informed the US that Russia had begun a systematic offensive against military facilities in Kyiv, the capital of Ukraine. Lavrov stated that in response to Ukraines continued attacks on Russian civilians and civilian facilities, the Russian military was conducting systematic and sustained strikes against facilities in Kyiv serving the Ukrainian Armed Forces. He reminded the US of the statement issued by the Russian Foreign Ministry that day and advised US diplomats and citizens to evacuate from Kyiv. The statement also said that the two sides exchanged views on the Strait of Hormuz and the situation in Cuba. Furthermore, both sides expressed their commitment to intensifying efforts to normalize the work of their respective diplomatic missions.U.S. Central Command spokesman Captain Tim Hawkins said the U.S. military conducted a self-defense strike in southern Iran on the 25th, “aimed at protecting U.S. forces from the threat posed by Iranian forces.” The spokesman said the targets included missile launch sites and Iranian vessels attempting to lay mines. “U.S. Central Command continues to defend U.S. forces while exercising restraint during the current ceasefire.”The UKs BRC Shop Price Index rose 1.2% year-on-year in May, down from 1.00% in the previous month.

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

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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.

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