News background and trading ideas for today 14.09.2018
Thursday turned out to be rich in events but did not bring any special surprises. The ECB predictably left the rate unchanged, but at the same time lowered the forecasts for GDP growth in the Eurozone (ECB forecasts for GDP in 2019 were reduced from 1.9% to 1.8%). Nothing fundamentally new about the monetary policy in the Eurozone and its future. So, there are no formal reasons for join the camp of bulls for the euro.
Nevertheless, weak inflationary data from the US (consumer price index slowed the growth rate from 2.9% y / y to 2.7% y / y) provoked dollar sales and led to the growth of the EURUSD. Once again, the current growth of the euro is more due to the dollar weakness than the euro strength. We note that the reduction in inflationary pressures raises the question of the expediency of further raising the Fed's rates at least at an aggressive pace.
The Bank of England also left the parameters of monetary policy unchanged and did not give any sensational comments. Nevertheless, the pound was able to extract the maximum from the weakness of the dollar after inflation statistics in the US and confidently closed the day above 1.3050. This is a rather strong bullish signal and confirmation of our previous recommendations in favor of buying pound. Another interesting moment from the press conference of the head of the Bank of England Mark Carney. He said that the withdrawal of the UK from the EU without a deal would rather lead to an increase in the Central Bank's rate, than to its decline. We regard this as a positive signal for the pound from the Bank of England.
By and large, now the GBPUSD has a straight road to 1.3250 ahead of the pair (reaching the mark is likely even today) with the subsequent increase to 1.3450. In the case of positive news from the negotiations on Brexit, we recall that the pound is quite capable of growing to 1.41-1.43 in the foreseeable future.
The reports from the trade-wars fronts are quite controversial. On the one hand, the Wall Street Journal writes that the US offered China a new round of trade negotiations. And on the other, Trump through Twitter is refuting this.
In total, we continue to recommend medium-term purchases of the pound, but the euro, paired with the dollar around 1.1720-1.1740, can be tried to sell. From the news of today, the main attention, perhaps, is the statistics on retail sales in the US. If data do not disappoint, then the dollar can get support and win back yesterday's losses.
Nevertheless, weak inflationary data from the US (consumer price index slowed the growth rate from 2.9% y / y to 2.7% y / y) provoked dollar sales and led to the growth of the EURUSD. Once again, the current growth of the euro is more due to the dollar weakness than the euro strength. We note that the reduction in inflationary pressures raises the question of the expediency of further raising the Fed's rates at least at an aggressive pace.
The Bank of England also left the parameters of monetary policy unchanged and did not give any sensational comments. Nevertheless, the pound was able to extract the maximum from the weakness of the dollar after inflation statistics in the US and confidently closed the day above 1.3050. This is a rather strong bullish signal and confirmation of our previous recommendations in favor of buying pound. Another interesting moment from the press conference of the head of the Bank of England Mark Carney. He said that the withdrawal of the UK from the EU without a deal would rather lead to an increase in the Central Bank's rate, than to its decline. We regard this as a positive signal for the pound from the Bank of England.
By and large, now the GBPUSD has a straight road to 1.3250 ahead of the pair (reaching the mark is likely even today) with the subsequent increase to 1.3450. In the case of positive news from the negotiations on Brexit, we recall that the pound is quite capable of growing to 1.41-1.43 in the foreseeable future.
The reports from the trade-wars fronts are quite controversial. On the one hand, the Wall Street Journal writes that the US offered China a new round of trade negotiations. And on the other, Trump through Twitter is refuting this.
In total, we continue to recommend medium-term purchases of the pound, but the euro, paired with the dollar around 1.1720-1.1740, can be tried to sell. From the news of today, the main attention, perhaps, is the statistics on retail sales in the US. If data do not disappoint, then the dollar can get support and win back yesterday's losses.
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