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Financial Markets Are Under Pressure

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On Wednesday, USD fell vs. JPY and declined to its lowest level in eight days, after suspicion grew that the BOJ would support its simulative monetary policies next week, while the market is awaiting clues on the timing of an increase in U.S. interest rates. The U.S. dollar index fell by 20 pips and settled at 95.33 pips.

USD settled below ¥102 amid expectation that the Fed could tighten its monetary policy.

The Pound surged vs. USD as the UK unemployment rate came in at 4.9%, unchanged from the three months to June.

GBP settled above $1.32 at yesterday’s trading session and is expected to continue its positive momentum during the course of the day.

Euro managed to settle at $1.12 vs. USD despite weak EU data. From a technical point of view, fiber could trade in a wide range, as markets are awaiting the USD Advance Retail Sales data and USD Philadelphia Fed, which will be released later on today.

Gold rose yesterday, breaking a five-day fall as the U.S. dollar declined vs. a basket of currencies. The yellow metal settled at $1,325 and could re-test $1,330 before retreating.

Oil prices fell as much as 3% yesterday, for the second consecutive trading session, as data showing large weekly builds in U.S. petroleum products offset a surprise draw in U.S. crude inventories. WTI was negatively affected by such data and declined to $44. Technically, WTI could trade under pressure until the end of the week.

The most important economic events:

  • GBP Bank of England Rate Decision (SEP 15): (GMT 13:00) – Important – Forecast (0.25%) – Previous (0.25%).
  • GBP BOE Asset Purchase Target (SEP): (GMT 13:00) – Important – Forecast (435b) – Previous (435b).
  • USD Advance Retail Sales (AUG): (GMT 14:30) – Important – Forecast (-0.1%) – Previous (0.0%).
  • USD Business Inventories (JUL): (GMT 16:00) – Important – Forecast (0.1%) – Previous (0.2%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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