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Market news: The U.S. Senate has passed a bill to increase federal science spending, after the White House had sought significant cuts.Foreign central banks held $3.888 billion in U.S. Treasury securities in the week ending January 16, compared with $32.218 billion in the previous week.US President Trump praised low oil and gas prices.On January 16th, Hassett, a leading candidate for the next Federal Reserve Chair, denied concerns that he would struggle to persuade other Fed officials to support his views if appointed. Hassett stated on Thursday, "Im tough enough to win debates. Anyone who comes to the White House and faces all the questions they might be asked for five years—like me—is tough enough to handle hostile situations and help people understand why they are right or wrong." Hassett has consistently argued that Fed Chair Powell and his colleagues have been too slow in cutting interest rates, a view shared by Trump. Fed watchers point out that interest rate decisions depend on a majority vote on the Federal Open Market Committee, and a Trump-nominated chair may not be able to forge a consensus on significant rate cuts. Hassett reiterated that Trump believes the Fed, under Powells leadership, has been politically biased, cutting rates before the 2024 election but halting the easing cycle after Trumps inauguration in 2025. "He believes that sometimes their decisions appear partisan," Hassett said.JPMorgan Chase CEO Jamie Dimon: I "absolutely cannot" become the Federal Reserve Chairman.

GBP/USD to Test 1.2260; Downside Remains Favored Due to Rising US CPI; UK GDP Watched

Daniel Rogers

May 12, 2022 10:13

The GBP/USD pair has broken to the negative from its week-long consolidation between 1.2260 and 1.2400. The asset may test the lower range of consolidation to confirm the bears' strength, but the downside remains intact as rising US inflation data has increased the likelihood of a massive rate hike by the Federal Reserve (Fed) in June.

 

Wednesday's 8.3 percent reading for the US Consumer Price Index (CPI) surpassed the 8.1 percent forecast by theștiindștiind. Market analysts anticipated that the Fed's June monetary policy would include a 50 basis point (bps) interest rate hike in response to the US CPI reading of 8.1%. Now, a higher-than-anticipated US inflation rate has increased the likelihood of a 75 basis point rate hike. This has shook the foreign exchange market, and investors are selling risky assets like there is no tomorrow.

 

In the meantime, the US dollar index (DXY) is trying to maintain its position above 104.00, although the upside remains intact. Regarding the British pound, investors anticipate the announcement of Gross Domestic Product (GDP) figures. The quarterly GDP estimate for the United Kingdom is predicted to be 1 percent, compared to the previous estimate of 1.3%, while the annual estimate is projected to be 9 percent, compared to the previous estimate of 6.6%. A higher-than-anticipated UK GDP may protect the pound from additional losses, whilst a weaker-than-anticipated figure would accelerate the asset's decline.

GBP/USD

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