The Bank of England’s policy meeting today is strongly expected to produce another rate cut, of 0.25%.
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The British Pound will be in focus today as the Bank of England holds a policy meeting today, which is widely expected to produce a rate cut of 0.25% which will bring the Official Rate to 4.25%, which is still relatively high today for a major currency.
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Yesterday saw a policy meeting at the US Federal Reserve. As widely expected by almost everyone, the Fed left rates unchanged, but Fed Chair Powell’s language took a bit of a hawkish tilt as a pre-emptive “tariff” rate cut was strongly ruled out, while an elevated risk of inflation was pointed to as a reason for holding tight. The US Dollar rose after this statement and has continued to make gains as the Asian session wraps up.
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The precious metal Gold has fallen after making a record high New York close the day before yesterday, suggesting a bearish double top pattern from the highs around $3,430, which points towards a strong possibility of further decline in line with the stronger USD.
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President Trump is fueling speculation that the UK will become the first country to sign a trade deal with the USA in his presidency. It is expected that this will be announced by Trump tomorrow and seems to be firming up major US stock market indices. The NASDAQ 100 Index is against trading above 20,000 (helped by President Trump making clear he will rescind chip export restrictions) although all major indices remain below their respective 200-day moving averages.
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Bitcoin has continued to rise after invalidating the former key resistance level at $95,206, which is a bullish sign. The price has just made a new 2-month high near the big round number at $100,000.
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The Forex market has seen the US Dollar rise firmly today. Since today’s Tokyo session open, the Australian Dollar has been the strongest major currency and the Swiss Franc the weakest one, suggesting momentum towards risk-off sentiment, despite the rising USD. The EUR/USD currency pair remains in a long-term bullish trend and most analysts will see it that way as long as the price holds up above the key support level at $1.1241.
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Yesterday’s release of New Zealand Unemployment Rate data was better than expected, remaining unchanged at 5.1%.
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There will be a release of US Unemployment Claims data today.
