ONLINE FOREX BROKER
2020-09-22 • Updated
Bank of England Governor Andrew Bailey delivered a speech today. Let’s discuss what it means for a trader.
The Bank of England cautioned that rising new virus cases in the UK may jeopardize the economic outlook, therefore, the bank needs to take hard actions to support the British economic activity further. Indeed, it seems that the Covid-19 has engulfed the United Kingdom: new infections are climbing by at nearly 6 000 a day. Therefore, the government may impose the second national lockdown.
Besides, coronavirus is not the only problem, which the UK faces. Brexit is also a significant issue, which has to be solved. Looking back at the latest Brexit talks, the EU and the UK are still far away from reaching an agreement. However, recent upbeat comments of European Commission President Ursula von der Leyen have curbed down fears over no-deal Brexit.
The central bank pledged to take hard actions to support the economy further. Many investors thought that last week the central bank hinted at the negative interest rates during its monetary policy statement. However, today the BoE’s governor said that investors took it wrong. According to him, negative rates are just part of the central banks’ toolbox, and the outcomes of implying them in different countries have been mixed. Since there are no negative rates on the horizon, which were initially expected by investors, the GBP has got support. The market was too rash to sell the GBP at the beginning and it’s trying to correct this mistake by buying it.
In addition, on Wednesday Manufacturing and Services PMI reports will be out at 11:30 MT time! If the numbers come out better than the forecasts, the GBP will rise. In the opposite scenario, if they come out worse – the GBP will fall.
Immediately after the report the British pound has dropped briefly, but then started climbing up. If it jumps above the high of September 14 of 1.2875, the way to yesterday’s high of 1.2960 will be open. On the flip side, the move below the support of 1.2780 will drive the GBP/USD lower to the 100- and 200-day moving averages at 1.2730.
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
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