POUND MOVES HIGHER FOLLOWING THE SPRING FORECAST STATEMENT
The US dollar fell after the release of the country’s inflation data and after the firing of Rex Tillerson. The Bureau of Labor Statistics released data that showed the core CPI for February declined to 0.2% from January’s 0.3%. The decline was in line with what traders were expecting. The core CPI grew by an annualized rate of 1.8%, in line with the analysts’ forecasts. The dollar index fell by 0.10%.
The British Pound rose against the major currency pairs after the Spring Forecast Statement by Philip Hammond. In his statement, he raised the short-term GDP forecast. In his statement, he noted that the economy will grow by 0.1% this year with no major changes in the projections for 2019 and 2020. After that, the GDP will slow by 0.1% in 2021 and 2022. The pound was 0.33%, 0.82%, and 0.17% higher than the dollar, yen, and euro.
The Canadian dollar fell against the dollar slightly after a report by Moody’s raised queries about the strength of the Canadian banks. According to the report, the rising interest rates has led to more uninsured mortgages and more longer-term car lending leaving banks at risk. The Bank of Canada has been in hiking mode, having increased rates three times since July.
The pair rose slightly following the release of United States’ inflation data that met analysts’ forecasts. The pair is now trading at 1.2365, which is the highest level since March, 8. The pair’s RSI is currently at 73, with the ADX at 37. The pair will continue being volatile as we wait for a statement from Mario Draghi tomorrow and the EU inflation data on Friday.
From last week, the pair has been trending downwards, making lower lows and higher lows. The pair is now trading at 0.8860. It is likely that the pair will continue its downward movements, potentially to the 0.8843 or below. Tomorrow’s statement by Draghi and the inflation data will likely influence the price movement.
The pair rose today from 82.72 to a high of 83.43, before slightly easing the gains. This was a continuation of an upward trend which was started early this month, when the pair reached the lowest level since July. The pair could remain volatile until tomorrow when the BOJ releases its minutes for the last meeting.