On Wednesday, BOJ’s (Bank of Japan) scheduled meeting brought no surprises, the monetary policy settings being left unchanged. The move was expected by most of investors, although there was still a push for the YEN over the USD, knocking the trend with over 40 pips. Kuroda (BOJ’s President) declared at the meeting that according to the Tankan survey, the Japanese firms are prepared to invest, boosted also by a favorable sentiment throughout the economy.
UK’s industrial production came up with 1% mom (month on month) for August, over the estimated 0.3% and far from July’s 0.4% drop. The annualized figure rose with 1.9%, with a forecast of 1.2%. The manufacturing output went up as well, with 0.5% versus 0.3% an estimation. ONS’s (UK’s Office for National Statistics) report details that the most important growth was in the next manufacturing sectors: transport equipment, basic metals and metal products, food, beverages and tobacco.
On the other hand, the output on Canada has not a so positive result, releases on Wednesday showing a decrease in the total value of building permits with 3.7% that means a setback to $7.5 billion for August, after the revised data for July showed a 15.5% increase, as well as a 0.7% hike upwards in July.
Thursday came with a 0.44% rise for the EUR/GBP major, the pair managing to hit 0.7370 being close to 0.7378 in the morning of the European trade sessions. The fresh selling pressure over the pond against the euro was brought by BOE’s (Bank of England) decision to leave the monetary policy unchanged, keeping the rate at the 0.5% threshold. Against the market’s prediction of a 7-2 vote, the actual decision makers were split 8-1, the only one voting for an immediate 0.25% increase being Ian McCafferty.
We can see that crude prices have spiked to their highest level since July, managing to reach just above the $50.00/barrel (this being considered a psychological mark) value as retaliation to the weakened dollar, on behalf of the latest FOMC minutes. The FOMC report explains Fed’s decision to wait for a rate hike in the light of the low inflation. There is significant concern among the council’s members over a premature pressure that might bring down Fed’s credibility of focusing on the inflation objectives. Crude prices rose a little over $50.00/barrel at the end of the communication, but managed to settle around the $49.5/barrel value with a 3.4% daily gain. The price hike is also backed-up by the conflicts in the Middle East, as a result of Russia’s active military involvement in Syria.
