Today’s Key Market Drivers – 4th August 2017
The British Pound was sold heavily on Thursday following the Bank of England’s August statement that showed the committee voted 6-2 to keep the cash rate on hold at 0.50%. The committee also lowered the UK’s growth, wages and inflation expectations giving traders some forward guidance that it should not expect the BOE to move the official cash rate higher until late 2018. The UK economy has been ticking along in the wake of the Brit’s decision to leave the EU and many expected the BOE to begin to move to a more hawkish view on interest rates. The BOE Governor Carney said in his press conference that Brexit was going to be a drag on businesses in the UK and this is why the committee had decided to lower its inflation, wages, and growth expectations. CNBC noted in its morning FX brief that last time the BOE committee voted it was 6-3 so it could be assumed that somebody changed their view on the economy and backed away from calling for an immediate rate hike. What actually happened as they correctly put it committee member Forbes has left the BOE committee and been replaced by Silvana Senreyro who is considered to be more dovish about the UK economy.
The BOE’s remarks did nothing to slow buying activity on the Euro and only seemed to increase the selling pressure on the US Dollar even with Durable Goods data beating market estimates. Today sees a statement from the RBA on monetary policy and local Retail Sales data at 11.30am. German factory orders, retail sales, and construction numbers are due in the European session and then in the US trading session the official US and Canadian jobs numbers. Expect to see some significant volatility on the US Dollar and Canadian Dollar at 10.30pm AEST.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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