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August 13th - According to foreign media reports, 83% of economists expect the European Central Bank (ECB) to raise its deposit facility rate by 25 basis points to 2.50% in September; 80% expect the rate to remain at 2.50% until the end of the year; and 63% expect it to remain at least 2.50% until the third quarter of 2027. Of the 69 economists surveyed, 57 (approximately 83%) expect a rate hike next month, a higher percentage than the 72% before the July meeting and 65% in June. This indicates that following the June rate hike, market consensus on another ECB rate hike in September is strengthening. Nomura Securities points out: "The longer oil prices remain at current levels and the higher they rise, the greater the risk of a second round of effects. The ECB cannot act before seeing these effects, but they can act in advance—which is exactly what the ECB has been doing. The risk is that if the ECB only raises rates once, it will look like a fine-tuning operation, which is not known to be the way monetary policy should be done. If they raise rates once, they will likely raise them again. Given that a rate hike in June is an obvious option for the ECB, we believe the probability of another rate hike is high."Iranian intelligence: Two “terrorist extremist group” action teams were destroyed in southeastern Iran, four terrorists were arrested, and two of them were killed.August 13th - Even after sources indicated that Prime Minister Sanae Takaichis government supported an interest rate hike, the yen remained near a key level against the dollar. The yen held steady on Thursday, trading around 159.36 against the dollar. Historically, when the exchange rate approaches 160, it usually signifies potential government intervention to support the yen. According to sources, the next interest rate adjustment is likely in September or October. They added that the central banks concerns about the weak yen pushing up prices, coupled with the governments desire to enhance the effects of recent US-Japan currency interventions, have led to a consensus on the necessity of an imminent rate hike. Investors said the news had little impact on the yen, as the market had already priced in a rate hike from the Bank of Japan. The yen has continued to weaken recently due to Japans large interest rate differential with the US and its heavy debt burden.August 13th - According to Lighthouse Pro, as of August 13th, the total box office for August 2026 has exceeded 2.5 billion yuan. "Spider-Man: New Day," "The Eight Immortals," "Welcome to the Dragon Restaurant," "Kung Fu Womens Soccer," and "The Annual Meeting Cant Stop! 2" are currently ranked in the top five at the August box office.A Reuters poll found that 55 out of 69 economists believe the European Central Banks deposit rate will reach 2.50% by the end of 2026. (In a July survey, 49 out of 74 economists held this view.)

After a Strong Rise Supported by the BOE's Dovish Guidance, EUR/GBP Floats Above 0.8700

Alina Haynes

Dec 16, 2022 11:57

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Following Thursday's trading above the important resistance level of 0.8700, the EUR/GBP pair is exhibiting range-bound behavior during the Tokyo session. After the Bank of England (BOE) sounded dovish on policy advice and the European Central Bank (ECB) announced a hawkish forecast for interest rates, market participants engaged in aggressive cross buying.

 

As expected, BOE Governor Andrew Bailey increased interest rates by 50 basis points (bps) to 3.25 percent. The inflation rate in the United Kingdom is in double digits, and the struggle against persistent inflation will continue for an extended period; hence, policy tightening is essential.

 

As direction for future monetary policy actions, the BOE noted that "the majority of the Monetary Policy Committee (MPC) feels that more bank rate increases may be necessary." The British pound has been subjected to great pressure due to the lack of clarity surrounding future policy tightening. Voting on the interest rate decision, policymakers supported the status quo because they regarded the current interest rate policy to be adequate for fighting inflation.

 

As predicted, ECB President Christine Lagarde raised interest rates by 50 basis points in relation to the Eurozone. Due mostly to rising food prices, the Eurozone's central bank expects inflation to remain well above its 2% target for a lengthy period of time. The ECB has upped its interest rate peak forecast because it anticipates two additional 50 basis point rate hikes.

 

The release of Retail Sales statistics for the United Kingdom will be significant for future forecasting. According to the forecasts, the yearly economic statistics (Nov) would likely decline by 5.6% compared to the previously reported 6.1% decrease. While the monthly data will decline from 0.6% to 0.3%, they were 0.6% in the previous report.


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