European and American equities soar on global growth hopes
European equities and American equities rallied as investors focused on key interest rate decisions by the Federal Reserve and the Bank of England later this week. The two banks are expected to leave interest rates and quantitative easing policies intact. Stocks are also rising because of the recent US inflation numbers that showed that consumer and producer prices were not rising as fast as expected. This led to a slowdown of the recent yield curve rally. Also, investors are reacting to the recent $1.9 trillion stimulus package signed into law by Joe Biden.
The price of crude oil rose slightly after data by Baker Hughes showed that the number of active rig count in the US declined last week. The number of total rigs fell to 309 last week. Still, the number of rig count has increased by 80% from its lowest level in 2020. The price also rose because of the relatively strong economic data from China, its biggest market in the world. According to the statistics agency, industrial production increased by more than 35% in February even as the country marked the lunar new year. Retail sales also rose by 33.8% in February.
The British pound wavered slightly today even after an upbeat statement by Andrew Bailey, the BOE governor. In his statement, he said that he was optimistic that the UK economy will continue its recovery process. This growth will mostly be because of the ongoing vaccination drive and government programmes. He expects that the overall inflation will rise to more than 2% in the near term. His statement came two days before the BOE interest rate decision.
The GBP/USD pair was little changed today even after the positive statements by Bailey. It is trading at 1.3922, which is where it ended last week. On the four-hour chart, the pair is between the important support and resistance levels at 1.3860 and 1.400, respectively. It is also at the same level as the 25-day moving average while the signal and main line of the MACD have formed a bearish reversal. Therefore, the pair may remain in the current range during the American session.
The EUR/USD pair declined to an intraday low of 1.1925. On the four-hour chart, this price is slightly below the important support at 1.1950. It is also slightly below the 25-day moving average while the Relative Strength Index (RSI) has started to decline. The MACD is also at the neutral level. Therefore, at this stage, the outlook for the pair is neutral.
The XBR/USD pair held steady at 69.15 after the Chinese economic numbers. On the four-hour chart, the price is slightly above the important support at 66.70. It is also slightly above the ascending yellow trendline while the RSI has moved slightly below the overbought level of 70. Therefore, the pair may continue rising as bulls target the next key resistance at 71.0.