Pound lower after Carney speech and Oil to the lowest level

Pound lower after Carney speech and Oil to the lowest level

Pound lower after Carney speech and Oil to the lowest level

As for specific dollar pair, USDJPY hit more than a monthly high on Wednesday when it reached 111.85. The dollar failed to maintain the positive momentum though and the past was last seen trading for the day around 111.50. In the meantime, EURUSD was marginally down at 1.1140, while most dollar gains on the day were recorded versus the pound.

As soon as the text of BoE Governor Mark Carney’s speech at Mansion House became available today, it led to steep declines of the pound versus other majors such as the dollar and the euro. Carney disappointed market participants by saying that now is not the time to raise interest rates. This follows rising expectations that the BoE is closer to a rate hike after a greater-than-anticipated number of Monetary Policy Committee (MPC) members supported such a move during the Bank’s latest meeting. GBPUSD posted a two-month low of 1.2610 in Wednesday’s trading, while EURGBP was last seen trading comfortably above the 0.88 handle – the pair started the day at 0.8749. Sterling is likely to face added volatility ahead of Brexit and other political developments.

As for European economic releases, monthly producer prices declined more than expected for the month of May. They record a decrease of 0.2%, slightly below the 0.1% decline expected. On a yearly basis, producer prices grew by 2.8% during the month, below forecasts of a 2.9% growth and April’s 3.4%. EURUSD and the EURGBP had little to no reaction as the data hit the markets in early European trading hours.

In commodities. WTI and Brent crude both witnessed a spectacular 7-month decline with losses nearly touching the 3.0%. WIT and Brent were last seen trading near the day’s low of 42.94 and 45.66 a barrel respectively. The decline was attributed to indications of rising production in Libya and Nigeria, the two OPEC member countries which are not bound by OPEC’s deal to cut production

EURUSD: EUR/USD’s fall from 1.1295 extended lower but it’s still staying above 1.1109 support. Intraday bias remains neutral with a focus on 1.1298 key resistance.




GBPUSD: GBP/USD’s decline and break of 1.2633 support indicate a resumption of fall from 1.3047. Intraday bias is back on the downside for a deeper decline.




USDCAD: Intraday bias in USD/CAD remains neutral as consolidation from 1.3164 continues. Another recovery could be seen. But upside should be limited by 1.3387 support turned resistance and bring fall resumption.




USDCHF: No change in USD/CHF’s outlook as it’s staying in consolidation above 0.9613. Intraday bias remains neutral at this point. As long as 0.9807 resistance holds, near term outlook remains bearish and deeper fall is expected.




USDJPY: USD/JPY lost momentum after hitting 111.78 and intraday bias is turned neutral first. Further rise is expected long as 110.63 minor support holds. Above 111.78 will target near term channel resistance (now at 113.02).




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***Information contained in this news letter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making, but merely provides information from the market for its clients as additional information being made available as per the events occurring in the financial markets.




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