Mark Carney’s focus on weak wages to keep record-low borrowing costs is up against one key foe: the strongest economic growth in the Group of Seven.
Minutes of the Monetary Policy Committee’s July meeting this week will show how the nine members voted when they kept the key interest rate on hold and where the fault lines in their thinking lie. Last month, some said the threat to the recovery from an increase had diminished as growth becomes “more established.”
In the year since he introduced his forward-guidance policy, Carney has shifted the focus from the unemployment rate to spare capacity and now to wages as evidence that the economy can continue to grow without fueling inflation. While the governor said last week the MPC has a “wide range of views” on the level of slack in the economy, indicating it isn’t unified in its analysis, continued pressure on the recovery from a stagnant euro area and geopolitical risks may defer tightening.
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EUR/USD comes under pressure near 1.0630
Further gains in the Greenback encourage sellers to maintain their control over the risk complex, forcing EUR/USD to retreat further and revisit the 1.0630 region as the US session draws to a close.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.