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GBP/USD Forex Market Back Above Key Level

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GBP/USD Forex Market Back Above Key Level
  • Market jumps back above important 1.30 figure after shaky start
  • Pound buoyed by positive CPI
  • No Deal Brexit and China fears still holding traders


The GBP/USD has begun to climb again after a protracted period of uncertainty which has seen it hover around a key benchmark area. 1.30 has been a sticking point for the market over recent days and weeks. This is no surprise given the level of uncertainty that has plagued the geopolitical scene of late. A turbulent Brexit was finally brought to pass, this though is far from done with many of the key negotiations still to come before the end of 2020.

USD Silence Helps the Climb Back

The currency pair is in fact reversing the previous day’s session that saw it close below this key point. It is doing so with the help of a very quiet USD currency and market. This could be related to the news earlier in the week of a revenue warning from Apple. With the DOW Jones, and NASDAQ also down, it is possible that traders are giving the market a slightly wide berth for now and waiting for some more positive news on the global stage.

Consumer Price Index Boost for GBP

The strength of the Pound in this pair can be somewhat attributed to the recent release of economic figures more than the current and ongoing post-Brexit negotiations. Both the CPI (Consumer Price Index), and PPI (Producer Price Index) which measure how price rises and inflation impact both parties, came in stronger than expected.

While this may not spell great news for British consumers at the checkout with inflation reaching a high point, it has given the currency a boost. This number may show that UK production and consumer spending have been very healthy in real terms.

The British CPI managed to jump 1.8% in its year-on-year number for January. This is steadily more than the 1.3% rise of the previous year and again more than the 1.6% expected. All in all, a potential rise in consumer confidence may be garnered from these figures.

Still Worries on the Horizon

Despite the positive movements of the day, there are still challenging points for the pair, and the wider economy to deal with. On a somewhat domestic level, the ongoing negotiations about the future UK relationship with the EU are set to drag on. Latest headlines today show that the UK remain committed to a points-based entry system that will severely limit opportunities to unskilled worked from outside the country.

Finally, in China, there is still the ongoing issue of the Coronavirus. Catching few headlines but the virus is still serving to restrict operations of companies within China and overseas. This widespread supply chain disruption is seen to be behind the Apple revenue warning and the fall of both the DOW and the NASDAQ which is heavily reliant on the Chinese market.

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Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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US Unemployment Rate Doubles Causing Forex Market Waves

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US Unemployment Rate Doubles Causing Forex Market Waves
  • Rate has doubled from Previous Weeks Record
  • Record High is worse than Analysts Predicted
  • EUR/USD Slides Again as Oil the Only Positive

US unemployment rate figures just released make for very grim reading. A hammer blow to start Thursday, the figures show that more than 6.6 million Americans filed for unemployment benefit amid the ongoing COVID-19 crisis. These numbers more than doubled the already unprecedented record of 3.3 million jobless claims from the previous week. The market has been somewhat slow to react to this news, but remains poised for the jobs report to be released later today.

New and Unwanted Records Being Set

Last week’s unemployment numbers of 3.3 million were far beyond the previous record high set in 1982. The number was almost 10 times greater than that set almost 40 years previous. The new weekly number from today puts that even further into the shadows. These are unprecedented times of difficulty throughout the US and global economy which show little sign of let up at present. At the time of writing, the Dow Jones was trading 150 points lower on release of the news which sees more than 10 million people in the US now filing unemployment claims in the past two weeks.

Some solace can be found in the fact that the latest $2 trillion stimulus package has made it easier for workers who have been furloughed in the crisis to remain on unemployment benefit, and also expanded the scope of those who could apply for the benefit. The previous high of 695,000 claims in 1982, and the 665,000 during the previous financial crisis of 2009 now seem miniscule by comparison.

Numbers Outpace Expert Prediction as Euro Falls

Analysts had predicted that numbers would should a marked increase. The results though, have gone far beyond even what the most pessimistic of onlookers imagined. This movement looks set to continue with more labor data to come on Friday. This government data release is set to show more huge losses across the board.

The forex market impact is already being felt as the EUR/USD market fell back below the $1.09 mark. The currency pair had worked hard over the previous week to build back up significantly, but on release of more negative data from the US, it has given way to the continually increasing safe-haven role of the greenback.

Oil Rebound Provides Glimmer of Positivity

At the opening bell, the one positive to garner from the start of the day comes from the news that the price war between Russia and Saudi Arabia may be nearing an end. Prices rallied across the oil markets more than 10% on these hopes. Nothing has been ruled out and there hasn’t been any concrete word besides an offering on Wednesday from US President Trump that the two sides would “work it out” in the coming days. This news would appear to have some truth behind it and has bolstered the market from record low levels.

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Asian Forex Market Strengthens as US Virus Cases Soar

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Asian Forex Market Strengthens as US Virus Cases Soar
  • JPY Posts Steady Gain to Start the Day
  • Other Asian Markets also boosted
  • COVID-19 Cases Increase to Make US Global Leader

Currencies and markets in Asia got Friday trading off to a positive start. Figures coming from Tokyo saw inflation easing to 0.4% for March. This, and the news that US cases of COVID-19 have now surpassed those of China, helped strengthen the JPY which has posted gains of more than 1% on the day against the US Dollar. Both the NZD, and the AUD, often traded as a proxy for the Chinese Yuan also posted increases.

This comes as confidence starts to return to the Chinese market, even though Beijing has now temporarily closed the country to all foreign visitors to prevent the spread of imported virus cases.

USD/JPY Improving From Low Point

Gains from the Japanese Yen against the USD during the Asian trading session on Friday have brought it back from a several week low point. Although the currency still remains under some strong selling pressure, this has been lightened by positive data released from Tokyo, combined with an easing of the USD safe-haven status from what it had been in the previous several days.

The JPY itself is a well-known currency that traders usually move to during times of uncertainty, though this had been rocked in recent weeks with the market turmoil present across Asia and the world. Stimulus hopes though, particularly in Japan, as PM Shinzo Abe prepped a $135 billion package for approval, have managed to thoroughly boost trader confidence. The Nikkei bounced back with a gain of almost 20,000 points Friday to reflect this.

Positive Ripple Felt Across Asia

While Japanese markets posted some of the biggest gains, there were rallies across the region. These extended to Shanghai and Hong Kong both posting positive numbers as the Asian economy looked to regain stability following a torrid period. Analysts are predicting a further push from these markets next week as they look to get ahead of US markets that are currently predicted to open lower after large gains on Wall Street yesterday.

The continuation of this positive trend will likely hinge a lot on news coming from China in the coming days and into next week as it continues to get back to work following the protracted shut down.

US Markets May be Shaken by Increased Case Numbers

With news coming today that the number of US COVID-19 cases has now overtaken that of China, traders wait to see how both the stock, and forex markets will respond. Traders were not deterred by huge unemployment numbers posted yesterday, but experts are predicting a slowdown to end the week with markets projected to open lower.

This comes after a significant rally saw the S&P 500 climb more than 6% yesterday. This could also prompt a further move away from the USD as traders look to other options for safety.

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Asian Forex Market Strengthens as US Virus Cases Soar
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Asian Forex Market Strengthens as US Virus Cases Soar
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Economic Stimulus Helps Boost GBP/USD Forex Market

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Economic Stimulus Helps Boost GBP/USD Forex Market
  • Huge Economic Stimulus Package Approved
  • Confidence Unmoved by Stricter UK Lockdown
  • Prince Charles Coronavirus Diagnosis Could Shake GBP

News that the Senate has agreed upon a huge stimulus package to provide some much needed relief to the US economy was greeted positively at the opening of today’s markets. The GBP/USD continues its rebound, surging to 1.19 on release of the news. This is a good start to a busy day for the pair which could see movement on the release of a host of data. These numbers include inflation, and Retail Price Index numbers from the UK as well as Durable Goods Order data from the US.

Package Approval Met With Huge Market Increases

Maintaining context important, and on that front, global markets have been suffering greatly and at multi-year lows during the present crisis. Still the news of Senate approval for the economic measures proposed, brought positive reaction throughout the markets. The Dow Jones posted its biggest one day gain since 1933 and the Great Depression. It was up 11.4%.

Similar numbers were being posted across the world, with the Nikkei in Japan closing 8% higher on the news. Analysts are taking nothing for granted and warning of further bounces ahead, but it is some of the first positive news in weeks, though the US still faces up to the reality of growing virus case numbers across the nation.

Tightening of Lockdown Does Little to Impact GBP

British PM Boris Johnson on Monday moved to further tighten lockdown restrictions in the UK. This is a move that many feel is coming well over time, but still required nonetheless. He instructed the closure of all non-essential businesses, and provided increased powers to police to disperse gatherings among a range of other measures.

This news surprisingly did little to move Sterling from what was already a precarious position. Much of this may have been due to the fact that the market had already “bought the rumor”, and was in position expecting the inevitable news. Still, much of the increasing GBP market today stems from improved trader confidence in the US to move away from the safe haven USD slightly. This is a position which could still certainly change given that the US still seems a long way from flattening the COVID-19 curve.

Prince Charles Virus Diagnosis Could Rock Market

With the markets virtually ignoring much of the data released in recent days and weeks, instead moving largely on sentiment around the COVID-19 spread, news just released could prompt a further weakening in the GBP. Heir to the throne in the UK, Prince Charles, has just been diagnosed with coronavirus. He is said to be displaying only light symptoms, though it is certain to ignite concern for other members of the Royal Family, including the Queen.

It remains to be seen how the GBP forex market will react to this news, but it is certainly another factor which could work to further disrupt the market confidence.

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Economic Stimulus Helps Boost GBP/USD Forex Market
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Economic Stimulus Helps Boost GBP/USD Forex Market
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