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Hello everyone, today XM Foreign Exchange will bring you "[XM Official Website]: The British pound has gained support due to overheating inflation, pay attention to the minutes of the Federal Reserve meeting." Hope it will be helpful to you! The original content is as follows:
The pound holds its ground after two consecutive days of decline, and the market is evaluating the UK's inflation data in July. Later in the U.S. session, the Federal Reserve will release minutes of its policy meeting from July 29 to 30. Several Fed policymakers plan to speak in the second half of the day.
RBNZ announced earlier on Wednesday that it would cut policy interest rates by 25 basis points (bps) to 3% as expected. The policy statement shows that some policy makers tend to cut interest rates by 50 basis points, and stressed that if medium-term inflation pressure continues to ease as expected, there is room for further reduction of policy interest rates. New Zealand Fed Acting Governor Christian Hawkesby pointed out that they were happy with the decline in the New Zealand dollar (NZD). The New York dollar/USD was still under strong selling pressure early on Wednesday, with trading at its lowest level since mid-April, below 0.5850, a daily decline of more than 1%.
The UK National Statistics Office reported on Wednesday that the Consumer Price Index (CPI) rose 3.8% year-on-year in July. The figure lwcgm.cnes after a 3.6% increase in June, higher than market expectations of 3.7%. During this period, the core CPI also rose by 3.8%. Monthly, CPI rose 0.1%, while analysts expected a 0.1% decline. After the inflation report was released, the pound/dollar rebounded from the daily low and finally rose slightly on the day, slightly above 1.3500.
Basic market trends in the foreign exchange market:
The US dollar index closed at the positive area for two consecutive days, and is still in the consolidation stage above 98.00. Meanwhile, U.S. stock index futures fell 0.3% to 0.4% in early European trading, highlighting the marketA cautious stance. The U.S. Treasury Department will hold a 20-year Treasury auction later that day.
Euro/USD is difficult to rebound, and trading below 1.1650 during the European session on Wednesday. The European Statistics Office will release a correction to July inflation data later in the session.
Stat Canada reported on Tuesday that Canadian annual inflation in July, measured by changes in CPI, fell to 1.7% from 1.8% in June. The U.S. dollar/Canadian dollar fluctuated in a narrow channel above 1.3850 earlier Wednesday after gaining about 0.5%.
Japan data earlier on Wednesday showed that machine orders rose 3% month-on-month in June. This figure significantly exceeded market expectations for a decline of 1%. Other data show that exports and imports fell 2.6% and 7.5% year-on-year respectively in July. The USD/JPY fell slightly during the European period, trading below 147.50.
Bulle market fundamentals:
Gold/USD pulled higher in early Wednesday, trading slightly above $3,320.
Analysis of major currency trends:
Euro: The outlook for Euro/USD has not changed, as range trading continues and intraday bias remains neutral. As long as the 1.1589 support level is held, it is expected to rebound further. Above 1.1729, the 1.1829 high will be retested. However, on the downward side, a firm breakthrough of 1.1589 will turn downward and fall again, continuing the correction pattern of 1.1829.
GBP: The outlook for GBP/USD has not changed as the correction from 1.3594 is still continuing. The intraday deviation remains neutral. A deeper retracement may be seen, but the downside space should be controlled well above the 1.3398 support level. On the upside, breaking through 1.3594 will resume the rise from 1.3140, and retest the 1.3787 high.
JPY: USD/JPY is still in the range of 146.20/148.51, and the intraday tends to remain neutral. On the plus side, a breakout of 148.51 will indicate that the callback from 150.90 has been lwcgm.cnpleted and brings a retest of this high. This will also keep the overall rise of 139.87 active. However, a firm breakout of 145.84 support will indicate that the rebound from 139.87 has been lwcgm.cnpleted and put the near-term outlook bearish.
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