Last week took place the meeting of the Swiss National Bank and the Bank of England, the results of which could affect the dynamics of the Swiss franc and the British pound, respectively. As generally expected, none of the central banks did not make any changes in its monetary policy, so the market reaction to the events was insignificant and short-lived. Previously published data on consumer inflation in the UK fell short of the predicted values, which had a moderate pressure on the British currency.
Despite the inaction of Bank of England at the last meeting, as well as good data on the UK labor market, market expectations about the central bank lowering the interest rate at the next meeting remain high. Thus by the end of the week the pound has undergone to another wave of sales, as a result it has completed the week down against the US dollar in the area of the psychological level of 1.3000. Results of the week make it possible to keep a negative outlook on the pound, it can improve a steady growth above 1.3445.
The Japanese yen continued to be in demand during the last week, but on the eve of the meeting of the Bank of Japan, which will be held this week, the bears on dollar/yen did not have the resoluteness to break through support at 101.80-101.60. Opinions of analysts on the results of the meeting were divided: some do not expect any action from the Central Bank, while others rely on the further expansion of stimulus measures. The outlook on the yen remains positive, but the market reaction to any outcome of the meeting may be its selling, so before the event is better to refrain from opening the strategic positions in the yen. The same applies to the results of the FRS meeting and the dollar's reaction to them, that should be considered by the IAFT traders. BlogLinks
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