Jump to content

Central bank meetings could steer the FX markets: USD/JPY; GBP/USD; GBP/EUR


Recommended Posts

Kicking us off was a statement from the Australian central bank (RBA) indicating that rate rises may now start to slow.

 

 Jeremy Naylor | Writer, London | Publication date: Tuesday 20 September 2022 

Reserve Bank of Australia

Kicking us off was a statement from the Australian central bank (RBA) indicating that rate rises may now start to slow. AUD/NZD was where this was most felt versus that weak New Zealand dollar. After reading the minutes released overnight, there is no doubt the Reserve Bank of Australia will continue to raise rates, but nonetheless said there was a case for slowing the pace of increases. "All else equal, members saw the case for a slower pace of increase in interest rates as becoming stronger as the level of the cash rate rises."

Then it’s the turn of the Federal Reserve (Fed) with an anticipated 75 basis-point (bps) rise, although an outlying full percentage point hike may be on the cards. At the last Federal Open Market Committee (FOMC) meeting in July, when the Fed hiked interest rates by 75-bps, Fed chair Jerome Powell said that "another unusually large increase could be appropriate" at the bank's next meeting.

US consumer price index (CPI) unexpectedly rose in August, which led the market to wonder if the Fed could hike by more than 75 basis points at its September meeting. The latest market expectations show that a majority still expects rates to rise by 75 basis points, while the latest data shows that 17% see a full percentage point increase.

Thursday sees rate meetings from both the Bank of Japan (BoJ) and the Bank of England (BoE). The BoJ is widely expected to stay ultra-accommodative while the BoE is set for another 50bps rise, keeping a lid on any gains for the pound.

As opposed to the Fed and the European Central Bank (ECB), the BoE hasn't yet opted for a larger, one might say more courageous rate increase of 75-basis points, which is one of the reasons why GBP/USD has fallen some 15% in the past eight months.

In China, the People's Bank of China (PBoC) kept key rates steady at its September fixing. As widely expected, one-year loan prime rate remained at 3.65%, while the five-year rate which is a reference for mortgages, was maintained at 4.3%.

 

 

 

IG Group.PNG

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,293
    • Total Posts
      90,935
    • Total Members
      41,413
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    blank
    Joined 07/02/23 17:19
  • Posts

    • Look Ahead to 08/02/23: Oil inventories; TTEF, DIS, UBER and BDEV earnings Oil, tech, and the consumer are set to dominate the markets on Wednesday, with earnings from TotalEnergies (TTEF), EIA data, and results from Walt Disney (DIS) and Uber Technologies (UBER). Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Tuesday 07 February             
    • 07 February 2023 Spot Gold The price of gold has extended its pullback from overbought territory over the last week and has found some near-term support at the 50-day simple moving average (50MA) (green line). Our preference remains to look for long entry on a bullish price reversal. A bullish reversal might be considered if we can see price closing above the 1875 level, provided that the 50MA is not broken with a price close below. Should the 50MA level be broken and the price reversal not confirm, 1820 becomes the next downside support target from the move. In this scenario we not looking to short gold but would rather be looking for a bullish price reversal closer to this level for long entry once again. Should either of these scenarios manifest we will update our guidance accordingly with resistance targets and stop loss considerations. Source: IG charts       Brent Crude Oil The bearish reversal off the 8770-level guided in our previous note has yielded a significant decline, although fallen short of the 7760-support target. The price now looks to be rebounding from oversold territory. Traders who have been short might consider this an indication to exit their trades. The longer-term trend bias is still considered down and should a bearish price pattern emerge before this level, new short entries might be considered. In this scenario a close above the 8770 level might be used as a stop loss consideration, while targeting a move back towards the support low at 7760 once again. Only on a move / close above the 8770 level would the longer-term trend bias be reassessed, and long trades reconsidered Source: IG charts         Our weekly technical report is compiled by in-house senior market analyst, Shaun Murison.
    • Hi, the basic package has a 15 minute delay.
×
×
  • Create New...