BOE QIR: Inflation and Growth forecasts lowered

Omkar Godbole FXStreet Contributor

FXStreet (Mumbai) - The Bank of England, in its Quarterly Inflation Report (QIR), revised the 2015 and 2016 growth forecasts lower and fired warning shot regarding the disinflationary impact of a strong Pound.

The QIR says, “CPI to remain below 1% until H2 2016 and model forecasts CPI 2017 at 2.1% based on market interest rates last week. Market interest rate assumption based on first rate hike in Q1 2017”

GDP revised lower

Lowers end of 2015 growth forecast to 2.7% from 2.8%

Lowers end of 2016 growth forecast to 2.5% from 2.6%

Weak CPI ahead

Lowers end of 2015 CPI forecast to 0.1% from 0.3%

Lowers end of 2016 CPI forecast to 1.2% from 1.5%

Lowers end of 2017 CPI forecast to 2.0% from 2.1%

End of 2018 sees CPI overshooting target at 2.2%

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD looks offered just above 0.7100

AUD/USD has extended Monday’s pessimism, briefly breaching below the key. 0.7100 contention zone to hit three-day lows. The firmer tone in the Greenback has been keeping the Aussie under pressure while investors continued to gear up for the upcoming Trump-Xi Summit on Thursday.

USD/JPY holds small gains near 157.50 as JPY intervention risks loom

USD/JPY posts modest gains while trading near 157.50 in the Asian session on Tuesday as intervention fears help limit losses for the Japanese Yen. However, the BoJ's dovish rate hike to a 31-year high keeps JPY bulls on the back foot. Meanwhile, the US Dollar retains a bullish undertone amid the Fed's hawkish outlook and escalating Middle East tensions, providing tailwinds for the pair.

Gold makes a U-turn; focus shifts to $4,400

Gold regains balance and now trades with decent gains, approaching the key $4,400 mark per troy ounce on Tuesday. The yellow metal’s advance comes despite the resumption of the buying interest in the US Dollar, mixed US Treasury yields and geopolitical uncertainty.

Bitcoin reclaims key moving averages, altering bear cycle pattern

Bitcoin (BTC) may have altered its bear-cycle pattern after climbing above its 50-day, 100-day, 200-day, and 200-week moving averages, according to K33. In a Tuesday report, K33 noted that every time Bitcoin reclaimed all four major averages before now, it happened after the market had already established its cycle low.

Trump meets Xi: Why markets are watching this summit so closely

United States (US) President Donald Trump and Chinese President Xi Jinping are set to meet in Washington on Thursday for a summit closely watched by markets. After several months of easing trade tensions between the US and China, the meeting could determine whether the world's two largest economies extend their truce or enter a new period of uncertainty.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.