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The pair drops as today’s Australian inflation moderated significantly in May, not long after the RBA had hiked rates again in order to control it
The 02-year yield is a good proxy for central bank monetary policy. This is because the short end of the curve adjusts quickly to changes in the cost of capital. As such, we can look at the spread between two regions’ 02-year notes to get an idea on how the market views their respective monetary policies.
The pair heads towards its third straight profitable month, but trades with caution close to September’s intervention levels, as Japanese officials step up their rhetoric this week
The dollar has shown minimal response to the aborted Wagner mutiny in Russia over the weekend. The restrained reaction likely indicates the uncertainty surrounding the future course of action following the recent challenge to President Putin's authority.
The pair dropped last week and starts the new one with caution, as the aggressive hike by the Bank of England has sparked concerns over the economy and a potential borrowing crisis
The Central Bank of Turkey raised interest rates to 15%, from 8.5%. This pushed borrowing costs to their highest levels since late 2021. This is a stark turnaround of policy from President Tayyip Edogan’s unorthodox economic policies, which saw rate cuts in the face of higher inflation.
The pair rose on Wednesday helped by Mr Powell’s Congress testimony, which cemented the policy divergence between the Fed and the ECB, but trades with caution today
Last week saw the Fed’s hawkish pause. This week will bring it back into the spotlight as Fed Chair Powell presents two days of Congressional testimony regarding the central bank's policy on interest rates. On Wednesday, he will address the House Financial Services Committee, followed by the Senate Banking Committee on Thursday.
The hourly chart pulled back to the 38.2% Fibonacci and price support around the 1.0908 level. This served as a short-term platform for buyers to regroup.
The GBPUSD weekly has charted a higher trough followed by a higher peak. This puts the forex pair into an uptrend. The weekly RSI is on the bullish side of 50 (green rectangle). The longer it persists on this side, the greater the likelihood of further primary trend appreciation.
Today’s employment report showed an increase in wages in the UK, which keeps pressure on the bank of England for further monetary tightening , sending the pair higher, but US inflation and Fed decision loom
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