Carney: 'Brexit will be a test for the future of international cooperation'

Fundamental Analysis


“Brexit will be a litmus test of the future of international cooperation.”

- Marc Carney, Bank of England

On Thursday, the Bank of England Governor Marc Carney delivered a speech at the Institute of International Finance in Washington. In his speech, Carney said that financial regulations implemented after the global financial crisis should be able to transform in accordance with unexpected changes. He also stated that the Bank of England would stick to a “dynamic” approach towards financial regulations, ensuring the global financial system’s stability. Meanwhile, in the US, Donald Trump started the process of creating new financial regulations, arguing that financial restrictions are hampering economic growth. Carney also claimed the global financial system was at a “fork in the road”, providing boost to mutual suspicion between regulators. In addition, he highlighted that Britain’s withdrawal from the European Union would be a test for cooperation between financial regulators. The BoE Governor said that the Financial Stability Board was working on a revamp of the current financial regulations since the financial crisis, stressing that the FSB do not have the authority to force countries to act in accordance with its view. Back in January, the Congressman Patrick McHenry urged the Fed Chair Janet Yellen to stop cooperating with the FSB, claiming that the FSB’s rules run counter to the US interests.


“They have come down from really high levels, but these are still very good, positive readings.”

- Michael Trebing, Philadelphia Federal Reserve

US manufacturing activity in the Mid-Atlantic region slowed markedly in April, official figures revealed on Thursday. The Philadelphia Federal Reserve reported its Manufacturing Index dropped to 22.0 in the reported month, following March’s reading of 32.8 and falling behind analysts’ expectations for a decrease to 25.6 points. Analysts stated that business optimism prompted by Donald Trump’s win in the presidential election started to fade, putting downward pressure on business activity. Thursday’s data also showed the New Orders Index fell to 27.4 from 38.6 points posted in March, the highest since December 1987. Meanwhile, the six-month business outlook declined to 45.4 from 59.5 points registered in March, the strongest since August 2014. The Price Index dropped to 33.7 from 40.7 points posted in March, the highest since May 2011. On the positive side, the Employment Index rose to 19.9, the strongest since May 2011. Manufacturers also said that they would increase capital spending this year due to expected higher sales. Furthermore, 36.7 of the respondents said that capital spending would take place in the first half of the year. Other data release on Thursday showed initial jobless claims climbed 10,000 to 244,000 last week.

Download The Full Daily Forex Fundamental Overview



This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.