There
is a suspicion that the central bank may be waiting for inflation to ease
closer towards the 6-9% target band before taking any action. While this
approach is logical, recent reports of GDP growth decelerating in the first
quarter of 2018 could add extra pressure on the central bank to act. An
interest rate cut has the ability to stimulate growth because it encourages
consumer borrowing and businesses to increase investments.
Pound tumbles as
UK inflation slows
Continuous
signs of cooling inflationary pressures in the United Kingdom could force the
Bank of England to repeatedly delay monetary policy normalization this year.
UK
inflation has unexpectedly fallen to a 13-month low at 2.4% in April from 2.5%
in March, thanks to cheaper airfares. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Although the drop in inflation last month is good news for consumers since it
bolsters the value of real wages, this could be terrible news for the Pound.
With the currency well known for its sensitivity to monetary policy
speculation, further losses may be witnessed as investors scale back bets of a
BoE rate hike in August.
Focusing
on the foreign exchange outlook, the GBPUSD tumbled to a five-month low
following the release of the inflation figures, with prices trading marginally
below 1.3340 as of writing. The monetary policy divergence between the Federal
Reserve and the Bank of England has made the GBPUSD fundamentally bearish.
Sustained weakness below the 1.3400 level could encourage a decline towards
1.3320 and 1.3250, respectively.
FOMC meeting
minutes in focus
The
Dollar was king against a basket of major currencies on Wednesday ahead of the
release of May’s FOMC meeting minutes, which arelikely to be closely
scrutinized for clues on rate hike timings this year.
With
US inflation rising towards the Fed’s target and positive economic data
boosting sentiment towards the US economy, expectations remain elevated over a
rate hike in June. If the Fed meeting minutes are hawkish and reinforce
speculation of a June rate hike, the Dollar is likely to receive another solid
boost. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Taking
a look at the technical picture, the Dollar Index remains firmly bullish on the
daily charts. The combination of rising US Treasury bond yields and heightened
rate hike expectations have made Dollar strength a dominant market theme. A
decisive breakout above 94.00 could open the doors to 94.20 and 94.50, respectively.
Commodity
spotlight – WTI Oil
Oil
prices seem to have edged lower on expectations that OPEC may ease supply curbs
in June. However, losses are likely to remain limited thanks to geopolitical
risk factors. With the looming sanctions against Iran and falling output from Venezuela
fuelling speculation of tighter global supply, Oil could remain supported in
the near term.
While
Oil prices have scope to edge higher as bulls exploit geopolitics to fuel the
rally, surging US Shale production remains a threat to higher Oil prices. With
Shale production forecasted to hit a record high in June, bulls may face some
headwinds down the road.
In
regards to the technical perspective, WTI Crude could challenge $70 if bulls
are unable to secure control above $72.
Have you heard this? Many
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of exporting commodities to foreign countries. Do you know why? They were not
trained on export operations, management, documentations and the best methods
of payment in export trade. This is terrible!!! Nigerians cannot continue to
lose money to foreigners in the course of export business. Exporters, why don’t
you get a practical manual that teaches the stages of export trade from
processing and packaging of commodities to receipt of payment by the foreign
buyers. It teaches export operations, export management, export documentations
and methods of payment in export trade? It is a contemporary step-by-step guide
to export trade. It tells all the contemporary dynamics in export trade. To get
it, click on the link below:
Hmmm!!! Folks, have you ever
imagined how the financial status of your firm will be when more than 20,000
CEOs and other key decision makers of blue-chip corporations pay for your
products and services or even give you very juicy deals. The link below will
tell you more: http://www.tectono-business.com/2015/07/tectono-business-review-in-conjunction_21.html
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