BOE Cuts Growth & Inflation Forecasts
orbex market flash
USD Ends The Week Higher
The US dollar has continued higher over the final trading day of the week leaving the USD index to finish the week in the green. Better US data earlier in the week has seen reduced easing expectations for December, keeping USD supported here. Speaking yesterday, Fed’s Evans said he feels the US economy is in a good place following the October cut. This is reinforcing the view that the Fed will remain on hold over the remainder of the year. USD index trades 98.07 last.
EUR Down Again
EURUSD is lower again over the European morning so far today, with price fighting to hold above the week’s lows. A dismal set of EU economic projections yesterday highlights the issues facing the single market economy and supports the view that the ECB will be forced to ease further in the coming months. EURUSD trades 1.1040 last.
GBP Lower On BOE
GBPUSD has had a quiet session today with price remaining very constrained around the 1.2810 mark. Yesterday, the BOE kept rates on hold as expected, though with two members voting in favor of a cut, the meeting was notably more dovish than last time around. This is the first time that BOE policymakers have voted in favor of a cut since 2016. The dovish message was further emphasized by a lowered set of growth and inflation projections which the BOE attributed to Brexit uncertainty.
Risk Sentiment Weaker on Friday
Risk assets have been a little softer today in light of the USD rally. The SPX500 pushed further into new record highs over the week though momentum has paused for now on the back of stronger US data. With expectations of a US/China trade deal intact, however, the outlook remains bullish. SPX500 trades 3083.68 last.
Gold Lower, JPY Higher
Safe havens have had a mixed session so far today with gold lower against USD while JPY trades higher. Reduced US rate cut expectations are keeping gold pressured while a softer tone to equities is diverting flows back into JPY. USDJPY trades 109.33 last, sitting just off the week’s highs. XAUUSD trades 1466.78 last having broken back below the key 1481.93 support level which had been underpinning price action over the last three months.
Crude Crumbles on USD Rally
Oil has been weaker today on the back of the USD strength seen over recent days. On Wednesday, the EIA reported a large surplus in US crude inventories. This came a day after OPEC released its latest World Oil Outlook in which it heavily cut its demand forecasts over the near, medium and long term. However, while the US/China trade deal remains in focus, crude is likely to find support. Crude trades 56.29 last.
Loonie Makes Lift-Off
USDCAD has been higher today as a result of a stronger US dollar and a weaker Canadian dollar. Looking ahead to today’s US session we have the final tier one data of the week with the Canadian Unemployment rate due, expected to remain unchanged at 5.5%. USDCAD is challenging the 1.3207 level once again as of writing.
AUD Lower Following RBA SoMP
AUDUSD has been lower today, extending yesterday’s losses as the USD rally gathers pace. AUDUSD trades .6867 last, challenging the week’s lows. In its Statement on Monetary Policy (SoMP) released overnight the RBA downgraded its growth forecasts and noted that it is prepared to ease policy further if necessary.