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In our conversation with Alex Kuptsikevich, an analyst from FXPro, we delve into the Bank of England's recent decision on interest rates and its implications for the British economy and the GBP. The central bank's move to raise its key interest rate by 25 basis points to 5.25% is a significant step, marking the highest rate since 2008. This decision comes as Britain grapples with one of the highest inflation rates among developed nations, leaving little room for inaction.

Unlike the Federal Reserve and the European Central Bank, the Bank of England cannot afford to take a wait-and-see approach. The soaring inflation necessitates swift action, and indications suggest that the central bank may not stop raising interest rates until it reaches 5.75%, matching the peak of monetary tightening seen in 2007.

 

FXMAG: What is your assessment of the Bank of England's decision on interest rates? Should we still expect a hike in the Isles? And what's next for the GBP in the context of the BoE

NASDAQ, Non-Farm Payrolls, GBPAUD, Gold and More in The Next Episode of "The Trade Off"

Stock Market in 2022: Momentum on the Stocks in the Market Are In a Solid Footing

Finance Press Release Finance Press Release 28.01.2022 10:51
The year 2022 is seemingly a mixed bag, even as markets start reopening. The year looks promising, though, with issues like inflation and COVID to contemplate. Historic rallies in 2021 after lockdowns are looking to inspire trading in various industries, with some assets to look out for by investors. Growth will surely return at some point, but so will disappointing instances where tumbles will dominate trading desks. The S & P's historic gains of 30 percent dominated the press at the close of 2021, making investors using Naga and other optimistic platforms. The ended year had one of the longest bull markets. However, the Fed rate tightening and the direction the pandemic will take are some things to expect, notwithstanding that the stock market might grow by a whopping 10 percent in 2022. Trading Movements In Week One 2022 European markets have opened with a lot of optimism in 2022, the pan-European STOXX 600 closed at 489.99 points; this is 0.5 percent higher than the opening figure. The European benchmark was some percentage lower than the overall S&P 2021 performance, though with a surge of 22.4 percent. Record gains in the stock markets have relied on the positions taken by the governments during the pandemic. In the USA and Europe, increasing vaccination rates and economic stimulus measures have improved investor confidence. However, there are indications for more volatility in 2022, a situation investors must watch keenly. There has been little activity in London markets in the first week of 2022, while in Italy, France, and Spain gains of between 0.5-1.4 percent made notable highlights. European markets had diverse industries drive up the closing gains witnessed; the airline sector, in particular, has had a significant influence. Germany’s Lufthansa (LHAG.DE) had an impressive 8.8 percent jump while Air France KLM (AIRF.PA), a 4.9 percent gain. Factory activity is another factor to thank for the first week's gains all over Europe. Noteworthy, the Omicron variant influenced trading in the entirety of December, but the reports that it is milder than Delta has energized market activities coming into January. S&P and DOW Jones 2022 First Week Highs Across the Atlantic, the Dow Jones Industrial Average (DJI) and S&P 500 (SPX) closed at a record high, highlighting a similar aggressiveness as the European markets. While the jump was industrial-wide, Tech stocks continued to dominate, as Apple finally touched the $3 trillion valuation, though for a short time. Tesla Inc. (TSLA.O) posted a 13.5 percent jump thanks to increased production in China and an unprecedented goal to surpass its target. The US market, like the European market, is also in a fix; the Omicron variant of COVID-19 continues to cause concern with the wait-and-see approach, the only notable strategy. Currently, every country is reporting a jump in the number of Covid cases, with the UK going above 100K cases for the first time and the US recording some new records as well. School delays and increased isolation by key workers will surely debilitate the markets, with the global chip shortage another point to contemplate. However, markets can still ride on the increased development of therapies to help fight Covid. The U.S. Food and Drug Administration (CDC) has been quick, as now children can have their third doses as well. Industries to Look Out For In 2022 European automakers have seen early peaks, while the airline sector has also picked up fast. In the US, tech shares continue to dominate, and 2022 might witness new records never seen before. However, the energy sectors have also dominated the news in 2021, and in 2022; the confidence in them will continue to rise because of an anticipation of stabilization in energy prices. The same goes for crude oil prices. Regardless, shareholders will continue watching the decisions by the Federal Reserve, a review in the current interest rates will surely tame inflation. Conclusion 2022 will see its highs and lows in investments. Some assets will make the news and investors will be keen to use any information to make key decisions. Tech will continue to shine, but it is important to anticipate the direction of the pandemic, as it will be an important factor in investor decisions.
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

EURGBP - Does The Single Currency Strengthen? Bearish GER 40 Ahead?

John Benjamin John Benjamin 23.02.2022 08:52
EURUSD bounces off support The euro surged over signs that Moscow may remain open to diplomacy. The pair found support at the base of the previous rally (1.1290), indicating the bulls’ commitment to keeping the rebound intact. The RSI’s oversold situation attracted a slew of bargain hunters betting on a lengthy rebound. A break above 1.1390 would prompt sellers to cover and pave the way for a sustained recovery. The recent peak and daily resistance at 1.1490 is a major hurdle. Its breach could extend the rally to 1.1600. EURGBP attempts reversal The sterling whipsawed after BOE officials’ comment about a “modest” rate hike over the coming months. The euro saw strong bids at the base of the February breakout rally (0.8310). A break above 0.8370 wiped out some selling interest, a prerequisite for a meaningful recovery. 0.8400 is the next resistance and its breach would further boost buyers’ confidence and propel the single currency to the recent high at 0.8475. On the downside, a bearish breakout would invalidate the rebound pattern and cause a sell-off below 0.8280. GER 40 breaks floor Trepid sentiment continues to weigh on the Dax. The plunge below the 9-month long consolidation area (14850) may foreshadow a bear market. As traders grew wary, trapped bulls would look to get out of their positions while the bears saw any rebound as an opportunity to sell into strength. An oversold RSI brought in some bids and 14850 is the immediate resistance. However, the index would remain under unless it lifts offers around 15200. Otherwise, the psychological level of 14000 would be the next stop.
Assessing China's Economic Challenges: A Closer Look Beyond the Japanification Hypothesis"

US Close: Another strong employment report, Wages growth slows, Stocks volatile, Oil rallies, Gold steadies

Ed Moya Ed Moya 06.05.2022 23:33
US stocks appear to be on a permanent rollercoaster ride as investors debate continued signs of a strong economy alongside rising rates, which remains a drag on higher valuation companies. For Wall Street to remain fully confident in piling back into stocks, inflation needs to be showing signs it is easing and that is not happening yet. ​ ​   Market conditions look dangerous but some of these discounts are looking very attractive. ​ It seems that the base case is still that the inflation peak is in place and that the Fed will look to signal a gradual tightening path. Unless inflation shocks prove otherwise, the risk-reward ratios for some of the beloved mega-cap tech stocks are looking attractive. ​ It won’t happen immediately, but when the economy starts to show signs of weakness, that will give investors the green light to buy stocks.   Investors just can’t confidently buy stocks as too much uncertainty persists with what will happen with global growth and how far the Fed will take tightening beyond the summer. ​   NFP The US labor market remains strong as broadbased hiring continues. The economy added 428,000 in April, much more than the analysts estimate of 380,000, also matching the slight downward revision in the prior month. Wage pressures might be showing signs of easing as average hourly earnings ticked lower. ​ Still most signs suggest the labor market is tight and that wage pressures are not quite ready to post a meaningful drop. ​ ​ The labor market remains robust and that should keep the Fed’s half-point tightening on cruise control until the Jackson Hole Symposium.   Oil Crude prices just want to head higher as energy traders completely fixate over the looming European sanctions on Russian oil. ​ No one wants to be on the wrong side of a major crude supply disruption headline, so whatever oil price dips that happen will be short-lived. ​ US oil rig counts continue to rise, but that has not led to increased production. ​ The weekly Baker Hughes report showed oil rig counts rose by 5 to 557 rigs. ​   Gold Gold prices are still licking their wounds following the bond market selloff. ​ Eventually investors will need additional safe-havens, so gold might start to attract some flows if the dollar softens as the global bond market selloff extends. The dollar is slightly softer today, but that doesn’t mean it is ready to lose its crown. ​ Gold could still remain vulnerable to further downward pressure if inflation does not show further signs of peaking next. ​   Gold is trending right between the 50- and -200 day simple moving averages but still looks like it isn’t quite ready to rally. ​ Next week will be pivotal for inflation expectations and for Fed speak that could confirm their commitment to tightening by half a point per meeting until the Jackson Hole Symposium. ​   Read on Oanda This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

Tackling Turkey's Inflation Challenge: A Closer Look at Monetary Policy and Price Pressures

David Kindley David Kindley 03.08.2023 10:35
In our conversation with an analyst from broker Orbex, we delve into Turkey's current inflation situation and the effectiveness of the central bank's monetary policy. Turkey has been grappling with a persistent inflation problem, evident from the latest CPI and PPI readings. The Consumer Price Index rose by 9.49% MoM in July and by 47.83% YoY, indicating a concerning upward trend. While these figures are still lower than the peak inflation of 85% in 2022, they break an eight-month trend of inflation slowing down. The lira's sharp depreciation since President Erdogan's election win in May and the government's decision to raise taxes on essential goods and fuel have exacerbated price pressures, heightening the inflation risks.   FXMAG: What is your assessment of the CPI reading from Turkey, and do they allow the central bank to continue too loose a monetary policy? Turkey is facing a high and persistent inflation problem, as the latest CPI and PPI readings show. Turkey's Consumer Price Index rose by 9.49% MoM in July and by 47.83% YoY. Although these figures are much higher than the inflation rates in the US and EU, they are lower than Turkey's 85% peak in 2022. However, the latest figures are disappointing as they break Turkey's eight-month trend of slowing inflation. The lira's sharp depreciation since President Erdogan's win in the May elections has increased price pressures. The government also raised taxes on many essential goods and fuel, partly to cover the costly pledges it made before the ballot. This worsens the inflation risks. Meanwhile Turkey's Central Bank may soon be out of fire power as it has already responded with two sharp interest-rate hikes that raised its benchmark by 900 basis points to 17.5%.  
Australian GDP Holds Steady at 0.4% as RBA Maintains Rates at 4.10%

Bank of England's Bold Move: Implications for the British Economy and GBP

Alex Kuptsikevich Alex Kuptsikevich 03.08.2023 10:54
In our conversation with Alex Kuptsikevich, an analyst from FXPro, we delve into the Bank of England's recent decision on interest rates and its implications for the British economy and the GBP. The central bank's move to raise its key interest rate by 25 basis points to 5.25% is a significant step, marking the highest rate since 2008. This decision comes as Britain grapples with one of the highest inflation rates among developed nations, leaving little room for inaction. Unlike the Federal Reserve and the European Central Bank, the Bank of England cannot afford to take a wait-and-see approach. The soaring inflation necessitates swift action, and indications suggest that the central bank may not stop raising interest rates until it reaches 5.75%, matching the peak of monetary tightening seen in 2007.   FXMAG: What is your assessment of the Bank of England's decision on interest rates? Should we still expect a hike in the Isles? And what's next for the GBP in the context of the BoE's decision? The Bank of England is expected to raise its key interest rate by 25 points to 5.25%, the highest since 2008. Britain's inflation rate, one of the highest in the developed world, makes it impossible to pause and look around - a privilege the Fed has used and the ECB may do in September. It is worth bracing for indications that the BoE will not stop raising interest rates before the end of the year, taking the rate to 5.75% - the peak of monetary tightening in 2007.   The Bank of England's hawkish stance is also likely to attract buyers to the Pound, which has weakened over the past three weeks. An appreciating currency will suppress imported inflation and dampen consumer demand, helping to bring CPI back to the 2% target. With explicit hawkish comments from the central bank, GBP can avoid breaking the upward trend of recent months and accelerating its decline.  

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