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UAE Presidents Foreign Policy Advisor: The UAE is exercising restraint and seeking a way out for Iran and the region.The UAE presidents foreign policy advisor said Irans accusations against the UAE are "part of its unwise and chaotic policy."On March 15, S&P Global Ratings affirmed Saudi Arabias sovereign credit rating, adding that despite disruptions, non-oil growth momentum and related non-oil revenues should help support the economy. S&P stated that Saudi Arabia should be able to withstand the impact of the current conflict with Iran. S&P noted that the country should be able to shift oil exports to the Red Sea, utilize its vast oil storage capacity, and increase oil production post-conflict. The Saudi government should also be able to adjust investment spending related to "Vision 2030," a strategic framework launched by the country in 2016.On March 15th, Matt Reed, Vice President of the geopolitical and energy consultancy Foreign Reports, stated that an attack on Kharg Island could trigger Iranian retaliation against Gulf oil-producing countries. He said, "Iran will retaliate in kind." The United States warned on Friday that if Iran continues to block the Strait of Hormuz, Kharg Islands oil facilities could become the next target. Reed warned that the longer the conflict continues, the harder it will be to find alternative energy supplies. "At least 10 million barrels of oil are trapped in the Gulf every day, plus more than 4 million barrels of refined petroleum products and tens of billions of cubic feet of liquefied natural gas, with no easy alternatives." The International Energy Agency has announced the largest emergency oil reserve release in history, with 32 member countries planning to release approximately 400 million barrels of oil. However, Reed believes this measure will have limited effect, stating, "By the time the oil gets to the market, it may be too little, too late." He described it as nothing more than a "band-aid."On March 15th, local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that in the past 48 hours, the US and Israel had launched attacks on several civilian industrial facilities in Iran, resulting in the deaths of several workers. The statement said that after setbacks in its confrontation with Iran, the US and Israel have turned to attacking non-military industrial facilities. Iran warned that US companies in the region should withdraw from their facilities and urged nearby residents to stay away from industrial areas with US capital involvement to avoid potential attacks.

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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