October 2016

Daily analysis of USDX for November 01, 2016

USDX gained some ground during early Monday's session, but as the American session started, we saw some weakness in the greenback and now it's trading below the 200 SMA at H1 chart. That should mean that a decline towards the support level of 98.00 is ... [...]

Daily analysis of GBP/USD for November 01, 2016

Despite the recent bullish momentum lived by the Sterling, we're still calling for a bearish scenario in the short term for GBP/USD, as the price action doesn't seem to be in favor of the upside. The resistance level of 1.2310 is still a strong barrier... [...]

WSE: Session Results

Polish equity market closed slightly higher on Monday. The broad market measure, the WIG Index, added 1.18%. Sector performance within the WIG Index was mixed. Oil and gas sector (+1.66%) outperformed, while utilities (-0.98%) lagged behind. The large... [...]

Gold prices pulled back from a multiweek high

Gold prices pulled back from a multiweek high Monday as the U.S dollar strengthened and investors took profits on a late-day rally at the end of last week, says Dow Jones. Gold for December delivery was recently down 0.2% at $1,271.40 a troy ounce o... [...]

Where To Target GBP? – ANZ

"On a trade weighted basis, sterling has fallen 8% since parliament returned on 5 September after its summer recess. The resumed fall reflected the clear rhetoric from Westminster that Brexit will proceed; Article 50 will be triggered before the end of March next year - and the UK will regain control over immigration. The UK's position on immigration is at odds with the EU's principle of free movement of people. Consequently, expectations of a hard Brexit rose and weighed heavily on sterling.

However, for the moment that expectation seems to be discounted and until new political dimensions emerge, sterling may consolidate. What shouldn't be overlooked is that the economy is performing quite well for the time being. The housing market has perked up, the 3m/3m trend in retail sales shows upward momentum in consumption (September +1.8%), the labour market is holding up well, and inflation is showing signs of accelerating.

The rule of thumb is that every 10% drop in the exchange rate raises CPI inflation by around 1.75% over two years. Our expectation is that the BoE will probably upgrade its assessment of growth and inflation in the November inflation report. Meanwhile, the autumn statement on fiscal policy is likely to be expansionary and push out the timing of when a balanced budget will be achieved whilst also providing some current fiscal stimulus.

While it is impossible to quantify the appropriate risk premium for sterling and major questions overhang longer-run growth, in the short run sterling may have adjusted sufficiently".

ANZ targets GBP/USD at 1.22 and EUR/GBP at 0.88 by year-end.

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