Tightening Back on the Agenda

Adam Button AshrafLaidi.com

Global coordinated monetary policy tightening is back in play after a hawkish shift and the BOE and a bump in US fortunes. The pound soared after the MPC while the New Zealand dollar lagged. The Asia-Pacific calendar is light later but there are rumors of a North Korean launch. Our Premium long in GBPUSD hit its final target for 230 pip gain.

The MPC said some withdrawal of stimulus is likely in the coming months in a move that came as somewhat of a surprise. The pound climbed 150 pips on the headlines and added another 50 when Carney revealed he too thinks the possibility of a hike has “definitely increased.” Cable ran to 1.3400 in a fresh cycle high and finished at the best levels of the day.

The US dollar caught a bid early in the day after CPI rose 1.8% compared to 1.7% expected. Not long after the data, the questions started to mount. Wage numbers were soft and it appeared inflation was boosted by an unusual jump in shelter prices.

Chatter about a weak retail sales report on Friday also did the rounds, in part due to skews from Hurricane Harvey. Finally, Mnuchin sounded a worried note no growth late in the day that contributed to USD/JPY selling down to 110.25 from a high of 111.04.

Finally, Bitcoin fell 13% after China announced it will shut all local exchanges by the end of the month. It last traded at $3348.

Author

Adam Button

AshrafLaidi.com

Adam Button has been a currency analyst at Intermarket Strategy since 2012. He is also the CEO and a currency analyst at ForexLive.

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.