Pound surges, rate hike may follow

Andrew Masters FIBO Group

The British pound is powering ahead today against its US counterpart as more positive data raises speculation that a rate hike from the Bank of England again this year is a real possibility.

Retails sales figures from the UK released earlier today hit the market at 0.3 percent which was well above expectations for a figure of -2.2 and shows that even though the pound has lost a significant amount of purchasing power due to the uncertainty of Brexit, consumers are not afraid to spend.

The news follows on from yesterday’s inflation release, which also beat consensus coming in at 2.7 percent and is well above the BOE’s comfort zone of 2 percent.

A rate hike from the BOE is now firmly back on the table, which was unthinkable as early as last week

“Just a week ago, the prospect of another interest-rate rise in the U.K. sounded distant. Now with CPI at 2.7%, well over the Bank of England’s 2% target, talk of another rise suddenly sounds less outlandish,” said Jacob Deppe, head of trading at online trading platform Infinox

The Bank of England has many things to consider with regards to lifting interest rates such as the property market which has fallen off the rails this year and some believe any further rate hikes may lead to further falls in the real estate sector and this threat will be enough for the BOE to keep rates on hold for the time being.

"Slowing growth in house prices will strengthen the case for the monetary policy committee to hold back from raising the bank rate again within the next six months," said Samuel Tombs from Pantehon Macroeconomics.

Author

Andrew Masters

FIBO Group

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.