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On September 8th, Volker Treier of the German Chamber of Commerce and Industry stated that the setback in German exports in July stemmed directly from fluctuations in trade policy. Exports fell 0.8% month-on-month after five consecutive months of growth. He noted that a relatively weak global economy and increased competition are putting pressure on German exporters. However, exports to the US increased somewhat due to the Trump administrations announcement in July of a 10% tariff on EU imports. But Treier stated that the much-needed boost from an improved business environment for Germany and Europe has yet to materialize.On September 8, French Foreign Minister Jean-Michel Barrow announced that France would halt trade with Israeli settlements in the occupied Palestinian territories. France, along with the United Kingdom, Canada, Denmark, Spain, Finland, Ireland, Iceland, Norway, Poland, Portugal, and Sweden, issued a joint statement that day, committing to restrict trade with Israeli settlements. The joint statement said that the situation in the West Bank is rapidly deteriorating, with settler violence and settlement expansion reaching unprecedented levels. France, the United Kingdom, and Canada will propose national-level measures to ban trade with settlements. Barrow stated that France believes Israel must stop settlement expansion and related violence, and that France cannot support a situation that threatens the security of Israelis and Palestinians and regional peace and stability through trade. He also called on the European Union to take corresponding measures.On September 8th, British Foreign Secretary Ed Miliband announced in the House of Commons a shift in the UK governments Middle East policy and new sanctions against Israeli settlements in the West Bank. According to the measures announced by the British government, the UK will ban imports of goods from Israeli settlements in the West Bank and restrict British companies from providing certain services such as financing, construction, and advertising for new settlements.British Foreign Secretary: We will continue to assess the situation based on the actions of the Israeli government.British Foreign Secretary: Iran should not acquire nuclear weapons.

GBP/USD seeks to regain 1.2300 as higher UK CPI strengthens the case for a rate hike by the Bank of England and the USD retreats

Alina Haynes

Mar 23, 2023 15:00

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During the Asian session, the GBP/USD pair attempts to reclaim the resistance level at 1.2300. Following a vertical correction, the Cable has recovered to near 1.2260 as the market anticipates that the absence of hawkish interest rate guidance from Federal Reserve (Fed) chair Jerome Powell while addressing the economy at the monetary policy meeting indicates that the Fed is close to ending its policy-tightening spell.

 

S&P500 futures have generated some gains in the Asian session following a decline on Wednesday as a result of Fed Powell's confirmation that the fight against intractable U.S. inflation will continue. Chairman of the Federal Reserve Jerome Powell has ruled out rate cuts in 2023, citing the difficulty of controlling inflation. In addition, US Treasury Secretary Janet Yellen's statement that the government "does not plan to insure all uninsured bank deposits" heightened fears of a banking sector collapse.

 

Following a recovery move, the US Dollar Index (DXY) has retreated on expectations that additional credit tightening to protect banking institutions will reduce overall demand, economic activity, and inflation. In the interim, the demand for US government bonds has increased as a result of expectations that US Janet Yellen will end further policy restrictions and reduce support for all bank deposits.

 

On the front of the United Kingdom, the Pound Sterling is likely to maintain its strength as the Bank of England (BoE) is scheduled to raise rates for the eleventh consecutive time. Governor Andrew Bailey of the Bank of England is expected to raise interest rates by 25 basis points (bp) in response to rising food and non-alcoholic beverage prices, as well as rising energy costs, which have contributed to inflation in the United Kingdom.

 

In the midst of global banking turmoil, the Bank of England's (BoE) interest rate decision will be difficult, as policymakers were divided over whether to raise rates further or maintain them at their present level.


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