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According to Axios: A senior U.S. official said Iran has submitted an updated ceasefire proposal, but the White House believes the proposal lacks substantial improvements and is insufficient to reach an agreement.On May 18th, according to CNBC, EU Economic Affairs Commissioner Dombrovskis stated that the spring economic forecasts, to be released later this week, will show downward revisions to economic growth figures, while inflation figures will rise, due to the "stagflation shock" from the war with Iran. Dombrovskis stated, "We are experiencing a stagflation shock." He added that policymakers now have "more limited" room for action, with little room for large-scale fiscal responses like those during the pandemic. He stated, "We believe that the support measures we take should be temporary and targeted, rather than those that will actually drive sustained growth in demand for fossil fuels." Meanwhile, Dombrovskis described the EUs release of strategic petroleum reserves as "ongoing," adding concerns about supply shortages in areas such as innovative fuels. He stated, "The longer the conflict lasts, the greater the risk of certain supply bottlenecks, which further confirms our view that policy responses should not increase demand for fossil fuels."According to CNBC, Trump will introduce more prescription drug discount options.Turkish Foreign Minister: There is no reason why Iran and the United States cannot reach an agreement on a neutral position through negotiations.According to CNBC, the European Union will lower its economic growth forecast and raise its inflation forecast.

Despite the Bank of England's less hawkish forecasts, GBP/USD is expected to rise beyond 1.2170

Daniel Rogers

Aug 04, 2022 11:52

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The GBP/USD pair has showed a modest retreat after failing to reclaim the 1.2170 resistance level. As the US dollar index (DXY) is projected to extend losses below 106.30, the upside stays favored. After a good fall to the round-number support around 1.2100, the asset has resumed its general uptrend.

 

As investors await the Bank of England's monetary policy decision, the cable might exhibit some volatility in the near future (BOE). In consideration of market expectations, BOE Governor Andrew Bailey will raise interest rates to 1.75 percent as a second successive 50 basis point (bps) increase is anticipated.

 

No one could dispute the reality that households in the United Kingdom are suffering tremendous pricing pressures. The inflation rate has risen to 9.4 percent, and there have been no indicators of a peak as of yet. The rate of inflation might reach double digits if the rate of price growth continues to accelerate, and families will be forced to pay more for identical quantities.

 

Well, a 50 basis point rate boost is insufficient to battle the inflation monster. However, dismal growth estimates and a decrease in the Labor Cost Index prevent the BOE from sounding excessively hawkish.

 

On the dollar front, the US dollar index (DXY) is experiencing uncertain movement as the visit to Taiwan by US House Speaker Nancy Pelosi has exacerbated protracted Sino-US tensions. The United States has held the global leadership position for a considerable amount of time, and China is keen to take over. Therefore, the United States' backing for Taiwan, a country with enormous technical potential, has exacerbated tensions between the United States and China.


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