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Nov 3, 2017

BRITISH POUND TUMBLES AFTER THE BANK OF ENGLAND HIKE RATES 25 BASIS POINTS

POUND TUMBLES

The British pound tumbled after the Bank of England raised interest rates for the first time in over decade, with Bank of England policy makers signaling that another rate hike would not come soon.

Finacial markets took the rate hike as dovish, as BOE policy makers omitted language from its previous policy statement, saying that further hikes may be needed. The GBPUSD pair slumped towards the 1.3000 level, while the EURGBP pair spiked above the 0.8900 mark.

  • The GBPUSD pair remains strongly bearish while trading below the 1.3130 level. Further declines towards 1.3023 and 1.2980 remain most likely.

  • Should price action trade above the 1.3130 level, buyers may push price-action back towards the 1.3200 and 1.3268 levels.

NEW U.S TAX PLAN AND FED CHAIR

The Trump administration announced final details of the proposed reforms to the U.S tax systems this week. The new tax plan called for cutting the corporate tax rate to 20% from 35%, compressing individual U.S income-tax brackets, and eventually repealing the U.S estate tax.

President Donald Trump also announced his decision to appoint Governor Jerome Powell to the position of Federal Reserve Chairman. The appointment was widely expected by financial markets, with stocks, bonds and currencies showing only a muted reaction to the decision.

KIWI RECOVERS

The New Zealand dollar recovered from depressed levels against the U.S dollar this week, after New Zealand's jobless rate fell to a near nine-year low. Official data also showed jobs grew a 2.2 percent in the third fiscal quarter, which was far better than expectations of a 0.8 per cent rise.

The NZDUSD pair recovered towards the 0.6940 level, after finding a bottom at the 0.6819 level. The AUSNZD pair also fell back as the New Zealand dollar recovered, with price-action declining to 1.1076, after finding a ceiling just below the 1.1300 handle.

  • Should price action trade above the 1.1132 level, AUSNZD buyers may push price-action back towards the 1.1171 and 1.1289 levels.

  • Further declines for the AUSZND pair remain likely while price-action trades below the 1.132 level. Sellers may target the 1.1023 and 1.0900 levels.

BITCOIN HITS NEW RECORD

The price of Bitcoin surged above the $7,000 level this week, as the CME announced that they are looking to open a Bitcoin futures exchange, subject to regulatory approval. The price of Bitcoin eventually topped out at $7,350 per Bitcoin, which was a new all-time high.

Immediately following the surge higher to $7,350, the price of Bitcoin was subject to a digital flash crash, with prices plunging towards $6,850 within minutes, and eventually tapered off around $6,800, before recovering slightly.

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