Author: FX
GBP/USD holds steady amid holiday thin trading, UK debt concerns in focus The British Pound (GBP) is treading water against the US Dollar (USD) on Friday, as the Sterling comes under renewed pressure amid lingering fiscal concerns. A combination of cautious risk sentiment, stronger-than-expected US Nonfarm Payrolls (NFP) data, and political uncertainty in the UK is keeping the Pound on the defensive, with the GBP/USD pair struggling to extend its recent gains. Read More… Pound Sterling weakens as Chancellor Reeves’ welfare bill unleashes fiscal risks The Pound Sterling (GBP) faces selling pressure against its peers on Friday despite United Kingdom (UK) Chancellor of…
Bank of England (BoE) rate-setter Alan Taylor noted late on Friday that downside pressures are continuing to build up underneath the UK’s economy, signaling that early rate cuts may be needed ahead of a questionable forecasting period.Key highlightsWould expect bank rate to normalise close to 2.75%, absent shocks.Would expect bank rate, should MPR inflation projections be close to what we actually see, at around 3% by end of 2026.Better to cut rate now and hold for longer later rather than hold too long and cut in a hurry.Disinflationary forces are building this year.Insurance against deteriorating demand is advisable.A soft landing…
Gold benefits from a weaker Greenback amid thin liquidity on US Independence Day.Tariff uncertainty and Trump’s ‘Big Beautiful Bill’ lift demand for safe-haven bullion.XAU/USD whipsaws between key moving averages as the price hovers above $3,330.Gold (XAU/USD) is trading higher on Friday as news about United States (US) President Donald Trump’s passage of the “Big, Beautiful, Bill” filters through markets. With markets closed in the US in celebration of Independence Day, XAU/USD is trading above $3,330 at the time of writing.Liquidity is expected to remain light in the US following the holiday weekend, which could make bullion sensitive to developments that…
US stock market sentiment might feel frothy because it’s been a one-way TACO trade since Trump backed down on Liberation Day tariffs but most sentiment surveys weren’t overly frothy.That could be changing. The AAII survey — which is a solid one — rose in the latest week to 45% bullish from 35.1%. That’s a big jump and reflects a market that’s hitting all-time highs almost daily. Still, it’s not quite into territory that I would consider frothy, which is above 50%. Last year it peaked in mid-July at 52.7% bullish. You will note that the S&P 500 then fell 9%…
Get some good rest with this long weekend because next week we have some important events that could potentially trigger big moves in the markets. The focus will be on Trump’s letters with the new tariff rates and the US CPI. I think the CPI will be more important given that Trump put August 1st as the deadline for the new tariffs, and it therefore looks like another “TACO game”. Nonetheless, it might still keep things volatile, so headline risk will be high next week. That’s it for the week.Happy Fourth of July! Later this year, ForexLive.com is evolving into…
Composite PMI 44.0 vs 45.5 priorKey findings:Lack of new business weighs on activity Costs and selling prices rise at greater rates Confidence in outlook remains subduedComment:Paul Smith, Economics Director at S&P Global Market Intelligence, said: “Canada’s services economy remained deep inside contraction territory during June, as uncertainty caused in the main by US trade policies continued to weigh heavily on activity and new business volumes. International demand was again especially hard hit, and the outlook remains subdued given widespread uneasiness and challenges in forecasting business trends in the months ahead. “Positively, firms added to their staffing levels in June although,…
Inflation expectations are well anchored.ECB must be more agile when using forward guidance.These are just token remarks and the ECB has been more inclined to give potential scenarios rather than clear forward guidance lately due to uncertainty. The market is fully pricing one last 25 bps cut, possibly in December unless another surge in the euro or more soft inflation reports force them to cut in September. This article was written by Giuseppe Dellamotta at www.forexlive.com. Source link
India is proposing retaliatory duties at WTO against US tariffs on auto parts. They say 25% import tariff on vehicles and some auto parts by US amounts to safeguard measures. India reserves the right to suspend concessions and other obligations equivalent to the adverse effects of US measures on India’s trade.India reserves the right to increase tariffs on selected products exported by the US after 30 days from July 4th.Except UK and Vietnam, Trump’s team hasn’t done much progress with the other trade partners. Japan was said to be the easiest one and India was once expected to be the…
There’s basically nothing on the agenda today other than the Canadian Services PMI. The newsflow has been very limited and the price action in markets has been mostly rangebound. The NFP spikes have mostly been erased both in FX and US equity indices. The White House today is expected to begin sending letters to trade partners with the new tariff rates they are going to pay the US. Trump said that he expected “10 or 12” letters to be sent today with more coming in the next days and the process should be completed by the next week’s July 9th…
Credit Agricole highlights that renewed political and fiscal risks are weighing heavily on the GBP, with echoes of the traumatic September 2022 gilt crisis continuing to shape investor sentiment. Uncertainty over UK Chancellor Rachel Reeves’ future and the Government’s fiscal credibility is keeping GBP vulnerable.Key Points:Fiscal Austerity and Policy U-Turns:• Investors remain concerned about the growth-negative impact of last year’s fiscal austerity measures, which took effect in April.• A backbencher rebellion forced PM Starmer’s Government to water down a welfare reform bill, sacrificing GBP 5bn in planned savings and calling into question Labour’s pledge to avoid tax hikes.Political Drama Adds…