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US President Trump: Americans are paying higher gasoline prices, but its a "very cheap price" relative to what the US has achieved.On September 17, the Hong Kong Monetary Authority (HKMA) announced a 25 basis point increase in its benchmark interest rate to 4.25%. This is the first adjustment to the benchmark interest rate by the HKMA since 2023, ending a period of interest rate stability. This rate hike is a direct response to the Federal Reserves policy change on the same day. The HKMA stated explicitly that following the Feds policy is to maintain the Hong Kong dollars peg to the US dollar. Under this system, the Hong Kong dollar is pegged to the US dollar, and Hong Kongs monetary policy must be linked to the US to ensure exchange rate stability. Despite the increase in the benchmark interest rate, the market remains cautious about the actual changes in local credit costs in Hong Kong. As is customary, major Hong Kong banks typically announce their own interest rate adjustment plans later that day after the HKMAs adjustment, with changes to the prime lending rate being particularly crucial.Multiple explosions were heard in Kyiv, Ukraine, in the early hours of September 17 local time.US President Trump: (Regarding Iran) I predict the war will end soon, and the government has transformed the United States from a “dark age” to a “golden age.”September 17th - US President Trump: "That war? That war will be over soon. Just watch. You just watch. Trump is right about everything. You just watch. They are being destroyed. They (Iran) very much want a deal. They call and say, We want a deal!"

The EUR/GBP exchange rate recovers above 0.8000 in advance of Eurozone inflation and UK gross domestic product

Alina Haynes

Mar 30, 2023 16:05

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The EUR/GBP pair extended its recovery above 0.88 during the Asian trading session. Anticipating that the European Central Bank (ECB) will continue to raise interest rates to combat persistent inflation, the cross has depreciated progressively. Friday will see the publication of preliminary Eurozone Harmonized Index of Consumer Prices (HICP) and Gross Domestic Product (GDP) (Q4) figures. Prior to the publication of these figures, it is anticipated that the asset will exhibit explosive activity.

 

It is anticipated that the preliminary Eurozone HICP will decelerate significantly from 8.5% to 7.3%. While it is anticipated that the core HICP will rise to 5.7% from 5.6% in the previous release. Weak energy prices are anticipated to have a significant impact on Eurozone inflation. In light of Christine Lagarde's prediction that inflation will remain elevated for an extended period of time, the European Central Bank (ECB) is expected to continue tightening monetary policy.

 

In the interim, banking tensions are subsiding as the absence of information regarding additional collateral damage has a positive impact on the market. Chief Economist Philip Lane stated on Wednesday that ECB interest rates must rise if banking tension has no or a "relatively limited" impact.

 

Investors avidly anticipate the United Kingdom's Gross Domestic Product (GDP) data. According to the consensus, the United Kingdom's growth in the fourth quarter of CY2022 remained unchanged. It is anticipated that the annual GDP will remain unchanged at 0.4%. It is expected that the British economy will undergo a severe recession as a result of high inflation and sluggish growth.

 

The Bank of England (BoE) policymakers appear confident that inflation will moderate in the near future and that the unexpected rise in February's inflation was a one-time anomaly; however, the absence of evidence raises doubts. If inflation persists, BoE Governor Andrew Bailey stated that additional rate increases would be announced. In contrast, Bank of America (BoA) analysts anticipate that the Bank of England (BoE) will not increase rates and will maintain current levels until 2024.


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