GBP/USD: the inflation rate in the Kingdom has updated the record for 40 years
The British currency shows multidirectional dynamics in a pair with the US dollar, trading at 1.2260. Earlier, the instrument ended trading with the smallest deviation of positions from the indicators of the beginning of daily trading.
Market participants are trying to evaluate the block of macroeconomic data from the National Statistical Service, published earlier, which reflected an increase in the rate of strengthening of inflationary pressure in May: the level was 9.1%, updating the record figure from 1982. The negative trend was caused by the factor of the rapid strengthening of the cost of electricity and raw materials in the markets, which reached a maximum from 1985, increasing in price by 22.1% due to the increased intensity of military operations in Ukraine. Meanwhile, on a monthly basis, inflation slowed down to 0.7% from the previous 2.5%, and the level of the benchmark index sank to 5.9% from 6.2%, which was able to exceed experts' forecasts for a reduction to 6.0%. RPI for May showed a strengthening of 11.7% after the previous 11.1%, ahead of market expectations of growth to 11.4%, although on a monthly basis the indicator decreased to 0.7% from the previous 3.4%, contrary to market forecasts of a decrease to 0.5%.
- Resistance levels: 1.2328, 1.2400, 1.2457, 1.2500.
- Support levels: 1.2250, 1.2163, 1.2074, 1.2000.
USD/TRY: Lira positions are at a record low
During the trading session of the Asia-Pacific countries, the USD/TRY instrument demonstrates multidirectional dynamics, trading at the level of 17.3000.
Economists believe that the situation around the Turkish currency is a consequence of direct manipulation by the authorities, in which Turkish President Recep Tayyip Erdogan is interested, promoting the idea of a wholesale rollback of the key indicator despite the situation of record inflation, which could reach the level of 73.5% in May terms. As you know, at the end of last year, the interest rate was adjusted to 14% from the previous 19%. According to the official's comments, this approach will continue in the medium term. This situation gives the strongest signal for the collapse of the Turkish lira, whose positions with the coming trading week reached the December minimum at the level of 17.3600. To date, the national regulator will adopt a further action plan on the level of repo transactions for the week, which has not been corrected since the end of last year. The further picture of monetary parameters seems to remain uncertain, because the authorities make it clear by their behavior that they do not plan to tighten monetary policy, at the same time, the tools used to combat inflation do not justify themselves.
- Resistance levels: 17.4055, 17.6000, 17.7500.
- Support levels: 17.1775, 17.0000, 16.7500, 16.6000.
USD/JPY: the "American" loses the level of a record high
The US currency is trading moderately lower against the Japanese yen, rolling back from the absolute records reached since the beginning of the week. The USD/JPY asset reached 135.40 with the prospect of a decline while market participants are waiting for new signals. The fundamental factors remain the same, while the US dollar is declining under the influence of a rather technical nature.
The final minutes of the Central Bank of Japan summit confirmed the growing panic towards a possible sharp weakening of the yen's position, at the same time, the regulator's policy continues to maintain a soft monetary policy. The participants of the meeting state that the strengthening of economic indicators is vulnerable, which is why, at this stage, it does not even make sense to revise the quantitative easing program. According to Japanese Prime Minister Fumio Kashida's comment, there is no need to correct monetary parameters and increase interest rates in the present. The Prime Minister confirmed that the national authorities will not follow the example of the world's central banks, even despite inflationary pressures in the world. To date, the focus of market participants is expected to release statistics on the number of applications for payments for unemployed persons from the United States.
- Resistance levels: 136.69, 137.50, 138.50, 139.50.
- Support levels: 135.57, 134.54, 133.70, 133.00.
Oil Market Overview
The cost of "black gold" continues to decline at Thursday's trading session, having suffered losses exceeding 2% in price because market participants were able to reconsider the likelihood of a recession and the demand for fuel due to the tightening of monetary parameters by major Central Banks of the world's leading economies. At the time of writing, the asset is held at 107.20. Raw materials continue to remain under pressure due to data on growing hydrocarbon reserves in the United States. A day earlier, API (American Petroleum Institute) released a report according to which weekly energy reserves increased in the amount of 5.6 million barrels, despite the onset of the summer season, during which many residents of the country prefer to travel around the country. In the medium term, experts say the most likely scenario is a further drop in the price of Brent Crude Oil.
- Resistance levels: 113.20, 119.23, 122.82.
- Support levels: 105.22, 101.11.