Forex Analysis for Friday 17th March 2017
Thursday: The Bank of England kept rates unchanged at 0.25% but there was one dissenter (Forbes) who wanted an increase. QE remained unchanged at 435B, voted for with unanimity. It was stated that a modest withdrawal of stimulus in 3 years is appropriate. The GDP forecast was raised to 0.6% from 0.5% in February.
ECB’s Nowotny stated that the ECB could raise interest rates in a different way than the US Fed, stating that America’s model is to finish bond purchases first, but this may not transfer well to Europe. He went on to say that the ECB could also raise the deposit rate earlier than the prime rate. (Handelsblatt)
The USD continued down yesterday after the dovish Fed. The initial move up in global equities turned into a down day for most. The S&P consolidates. It’s very much a story of consolidation. Gold and oil are both pushing up and the US 10 year treasury is range bound at two-and-a-half year highs. On the currency markets, the GBP rose after the news of one dissenting rate hiker came out. The EUR also rose after Nowotny’s statement. Elsewhere we see consolidation.
Today and over the weekend we have G20 meetings.
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