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February 3rd - Todays interest rate hike was a difficult decision for the Reserve Bank of Australia (RBA), as it had just cut rates last August. The RBA had previously bucked the trend of other economies, deliberately keeping rates low for an extended period to prevent soaring unemployment. Now, it becomes the first major central bank to return to a rate-hiking path since the pandemic began. Some economists had predicted that the RBA might wait for more data, given recent slowing monthly inflation data and the strengthening Australian dollars potential to "cool" the economy. Domains chief economist, Nicola Powell, stated that while the rate hike would reduce borrowers ability to finance their homes, it would also weaken the upward momentum in the housing market. Assuming lenders fully pass on the cost of the rate hike, a borrower with a $600,000 loan would see their monthly payment increase by approximately $90. The focus now shifts to the tone set by Governor Bullock at the post-meeting press conference. Economists are currently uncertain whether the RBA will continue with rate hikes or if this is a one-off event.February 3 - The Reserve Bank of Australia raised interest rates by 25 basis points to 3.85%, in line with market expectations, after holding rates steady for three consecutive days.The Reserve Bank of Australia (RBA) set its interest rate at 3.85% on February 3, in line with expectations and down from 3.60% previously.On February 3rd, DBS Bank senior economist Radhika Rao stated in a report that the Indian market is poised for a rebound following the announcement of the US-India trade agreement. She noted that high tariffs were a major factor dragging down market sentiment over the past quarter, while the agreement is "undoubtedly a significant boon to the real economy and exports," and will also boost financial market sentiment. Rao added that textiles, gems and jewelry, engineered products, leather, and chemical products are expected to be the main beneficiaries. She wrote that considering the punitive tariffs previously imposed for purchasing Russian oil, the reduction from 50% to 18% effectively brings Indias tariff levels close to those of most Southeast Asian countries.According to sources, Republican leaders in the U.S. House of Representatives are planning to vote next week on a key bipartisan housing bill.

The British pound is expected to rise against the dollar for four consecutive days, and the UK's economic recovery in September is stable

Oct 26, 2021 10:52

On Tuesday (October 5), the pound against the US dollar rebounded more than 40 points from the European morning low and climbed to a new daily high of about 1.3625 in the past hour.


After falling to the 1.3585 area during the session, the pound against the dollar attracted new buying on Tuesday and rose for the fourth consecutive trading day. As the stock market showed signs of stabilization, the US dollar gave up some of its intraday gains. This is also seen as a key factor in pushing the currency pair back to the multi-day top touched in the previous trading day, but any meaningful positive trend still seems elusive.

The market expects that the Fed will begin to reduce its stimulus measures and raise interest rates during the large-scale epidemic in 2022. This expectation may continue to promote the US dollar. In addition, concerns that the continued surge in energy prices will trigger inflation and derail the global economic recovery may further consolidate the relative safe-haven position of the U.S. dollar. This, combined with the ongoing fuel crisis in the UK, may limit the pound's gains against the dollar.

After Brexit and the COVID-19 crisis, the supply chain in the UK has become extremely tense due to the shortage of truck drivers. Last week, panic buying of fuel triggered chaos in major cities, forcing the government to send troops to gas stations to deliver gasoline and diesel. This, in turn, may prevent the bulls from betting aggressively and curb the uncontrolled gains of the pound against the dollar in the absence of relevant market economic data in the UK.

In terms of economic data, the UK service industry PMI in September was revised up from 54.6 to 55.4. The final value of the composite PMI rose from 54.8 in August to 54.9 in September. This is the first time since May that there has been no decline, and the initial value was 54.1.

Although the data represents the overall strong growth of the company, shortages of employees, raw materials and transportation have caused the growth rate of new orders to hit the lowest rate since the beginning of 2021 before the anti-epidemic blockade was lifted.

IHS Markit said that the data have not fully reflected the impact of the UK fuel crisis and the end of the month's energy price surge on inflation.

Market participants are now looking forward to the US ISM service industry PMI that will be announced in the North American market in early trading. The dollar bulls will further gain clues from the scheduled speech of Fed Governor Quarles and US bond yields, which, combined with broader market risk sentiment, may bring some trading opportunities for the pound against the dollar.

The upper resistance level focuses on 1.3687, 1.3762, 1.3844, and the lower support level focuses on 1.3602, 1.3572, 1.3538.

(Daily chart of British pound against the U.S. dollar)

At 19:38 GMT+8, the pound was quoted at 1.3631 against the dollar.

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