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Forex: GBP/USD back below 1.5700

The sterling is trading back to sub 1.57 levels after the post-Carney rally has taken the cross to session highs in the proximity of 1.5770
The upside of GBP lost momentum after the BoE left its monetary policy intact – rates at 0.50% and Gilts purchases at £375 billion – and the ECB ignited a sharp sell-off in risk-associated assets after talking down the single currency.

Earlier positive data out of the UK trade balance figures and industrial/manufacturing production added some buying interest to the pound.

As of writing, GBP/USD is up 0.19% at 1.5692 facing the next barrier at 1.5805 (high Feb.5) and then 1.5871 (MA21d).
On the downside, a breach of 1.5628 (low Feb.5) would open the door to 1.5578 (low Aug.10).

Forex Flash: What to expect out of Japanese policymakers – Goldman Sachs

Beyond the question of whether Japanese policymakers achieve success, a good anchoring point is to look at what a complete exit from a deep liquidity trap like Japan’s would look like across asset markets. According to the Economics Research Team at Goldman Sachs, “As an economy moves into a liquidity trap, nominal rates become unable to fall below the zero bound. The result is that real rates remain above where they would naturally be and the real (and nominal) exchange rate tends to be stronger than it would otherwise be. As a result, local asset markets are also weaker than otherwise, reflecting an excessively high real interest rate structure.”
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