The Pound/Dollar is continuing to recover from recent losses and is currently attempting to climb to a weekly high at 1.56, following the news that UK GDP growth matched estimates at an annualised 2.6%. While the pace of economic momentum in the UK might be slowing down slightly, this is still exceedingly strong growth and should raise investor sentiment towards the Pound. The UK economy is attractive to investors and if it was not for the depressed commodity prices inspiring the UK to encounter unexpected inflation risks, the Bank of England (BoE) would have most likely raised interest rates by now. The only problem is that since inflation levels in the UK are around record lows and with the recent resumed selling in commodity markets further weighing on inflation prospects, the BoE will continue to leave interest rates unchanged for a long time yet.
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EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
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