The Swiss Franc rose even after the Swiss National Bank (SNB) announced that it will continue the expansionary policies into the third year. The bank left the base lending rate at minus 0.75% and the London Interbank Offered Rate (LIBOR) at -1.25 to -0.25 percent. All this was expected by traders because the bank has always supported a weaker franc which supports the export-driven economy. In an interview with CNBC, the bank’s governor, Thomas Jordan said that the decision was driven by the weakening economy which comes after a robust start of the year.
The sterling rose today as a bruised Theresa May left for Brussels. This is after a vote of confidence happened yesterday in parliament. 200 MPs voted in support while 100 members voted against her. She also said that she won’t be the party’s flagbearer in the coming elections. Even with the victory yesterday, investors are aware of the complicated path that lies ahead. This complexity has made many investors avoid the sterling because no one knows what will happen when the proposal comes to parliament.
The euro moved sharply lower today after the European Central Bank (ECB) made its final interest rates decision of the year. As expected, the bank left the deposit facility rate at minus 0.4% as expected. The marginal lending facility was left at 0.25%. The biggest announcement was that the bank was ending the controversial quantitative easing program. This was a program where the bank printed more than €2.5 trillion and purchased securities like mortgage backed securities and treasury bonds. The QE was started in March 2015 and was aimed at rescuing the euro economy from deflationary forces and build confidence. The decision to end QE comes at a time when the EU economy is expected to slow in the coming year. On interest rates, the bank said that:
The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.
GBP/USD
The GBP/USD pair moved higher today as traders waited for a communication from Brussels. The pair reached a high of 1.2685, which was the highest level since Monday this week. On the hourly chart, the pair’s price is above the 25-day and 50-day EMA with the RSI currently at 63 and the ATR moving down. The pair will likely continue being volatile until a decision on Brexit is made.
The USD/CHF pair declined to a low of 0.9910 after the decision by the Swiss National Bank. The pair then started moving up and reached a high of 0.9930. On the hourly chart, the price is along the 50-day EMA and lower than the 25-day EMA. The RSI is at the 47 level and moving up. The pair could resume the upward trend after the dovish statement by the SNB.
The EUR/USD pair moved down after the ECB released its final monetary policy decision for the year. Initially, the pair reached a high of 1.1390 before falling to an intraday low of 1.1342 as Draghi was having a press conference. The price is below the 25-day and 50-day EMA while the RSI is currently heading to the oversold level. The price is also along the lower band of the Bollinger Bands. Focus will now shift to the Fed, which is expected to release its interest rates decision in the coming week.
General Risk Warning for FX & CFD Trading. FX & CFDs are leveraged products. Trading in FX & CFDs related to foreign exchange, commodities, financial indices and other underlying variables, carry a high level of risk and can result in the loss of all of your investment. As such, FX & CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with FX & CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to FX or CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.
Recommended Content
Editors’ Picks
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.