Forex News Roundup For The Day (February 15, 2023)
- GBP/USD rose on Tuesday after UK employment numbers exceeded estimates, but its increase was limited by better-than-anticipated US CPI figures that boosted Treasury yields.
- The UK consumer price index, to be released on Wednesday, is another significant economic report to monitor. If inflation persists, it may compel the BoE to adjust its dovish stance.
- Although monetary tightening might not be able to sustainably keep the pound on a recovery path, uncertainty regarding the Bank of England’s dedication to reestablishing price stability makes it difficult to be upbeat about GBP/USD in the near term.
- With the appointment of Kazuo Ueda as the new Governor of the Bank of Japan on April 8th, the Japanese yen declined as USD/JPY reached its highest level since January.
- Former Finance Minister Eisuke Sakakibara expects the policy to remain stable initially, with potential for rate hikes. The BoJ’s tightening is now a possibility, but a significant policy change is unlikely. The market may experience volatility until the new Governor’s intentions are clear.
- Clear signals by FOMC member Williams about forthcoming rate hikes are encouraging hawkish sentiments since it indicates that more has to be done to combat inflation.
- According to the CPI data that was announced yesterday, annualised inflation in the US has barely decreased by just 0.1% (6.5% to 6.4%) over the last month, contrary to economists’ expectations that it would have fallen to 6.2% by now.
- The primary cause of the ongoing rate increases, is the persistent inflation, which did strengthen the USD but also caused a decline in the stock prices. While Asian stock markets saw significant falls, US stock markets only experienced a modest dip.
- The price of gold was also affected by the strong US Dollar; at the moment, the XAU/USD pair is at its lowest level since January.
- The Australian Dollar is undoubtedly one of the weakest currencies at the most with the bears retaining the control over the AUD/USD pair. Whereas, USD and JPY are the strongest currencies at the moment.
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