EUR/USD: bulls get a chance to update local peaksDuring Asian trading, the European currency remains near the 1.0489 mark, correcting after the recent update of local highs on January 27. The market is showing restrained dynamics, as at the moment there are no important macroeconomic factors that can set the direction of movement. Investors focused on the possible resumption of tariff restrictions, which US President Donald Trump announced at the beginning of the month.Starting on March 4, 25% duties on imports of goods from Canada and Mexico, which were previously postponed for a month as part of preliminary agreements, will come into force. At the same time, the introduction of similar measures against EU products is not excluded, as Trump has repeatedly accused Brussels of unfair trade policy towards the United States. Experts believe that pressure on the European Union may increase in the framework of negotiations on the settlement of the Russian-Ukrainian conflict, given the resistance of individual countries in the region. In addition, the US president has repeatedly expressed interest in acquiring Greenland, which also causes controversy in international relations.The market's focus remains on the comments of European officials, which may give signals about the future monetary policy of the ECB. Pierre Wunsch, a member of the regulator's governing council and head of the National Bank of Belgium, called for a cautious approach to adjusting interest rates in order to avoid the risk of an excessive decline in the indicator. In turn, Joachim Nagel, President of the German Federal Bank, noted that price dynamics allow us to expect the target inflation rate to be reached this year. In this regard, market participants predict that the ECB will cut interest rates for the fifth consecutive time at the next meeting, as inflation, which exceeded double digits after the events of 2022, has now stabilized just above 2.0%. Additionally, traders drew attention to the final German GDP data for the fourth quarter of 2024: the country's economy shrank by -0.2% in quarterly terms and by -0.4% year-on-year, which coincided with analysts' forecasts.Resistance levels: 1.0500, 1.0550, 1.0600, 1.0654.Support levels: 1.0450, 1.0400, 1.0342, 1.0300.GBP/USD: the market expects a rate cut of 75 bp during the yearThe GBP/USD pair shows a downward trend during the morning trading session, returning to a corrective decline. The exchange rate is testing support at 1.2640, while traders expect new factors to appear that could affect further movement. Market participants continue to analyze the macroeconomic statistics for last Friday, assessing its impact on the prospects of the British currency.The January retail sales data in the UK turned out to be higher than expected, which supported the strengthening of the pound. On a monthly basis, the index rose by 1.7% after falling by -0.6% in December, although only 0.3% growth was forecast. On an annualized basis, sales slowed from 2.8% to 1.0%, but exceeded the projected 0.6%. Excluding fuel, growth was 2.1% month-on-month and 1.2% year-on-year, which was also higher than expected at 0.9% and 0.5%, respectively. However, business activity showed mixed results: the S&P Global index in the industrial sector in February fell from 48.3 to 46.4 points against forecasts of 48.4 points, while in the service sector the indicator strengthened from 50.9 to 51.1 points, exceeding preliminary estimates of 50.8 points.The issue of the rate of interest rate reduction by the Bank of England remains in the spotlight, as stated by the representative of the Monetary Policy Committee, Swati Dhingra. During her speech at Birkbeck, she noted that a gradual reduction in the cost of borrowing does not necessarily mean a standard reduction of 25 basis points. At the same time, according to a survey of leading economists conducted by Reuters, most experts predict that the British regulator will continue to ease monetary policy, reducing the rate by 75 basis points during the year.Resistance levels: 1.2650, 1.2690, 1.2747, 1.2800.Support levels: 1.2600, 1.2550, 1.2500, 1.2450.NZD/USD: the pair is preparing for continued growth after a pullbackDuring the Asian session, the NZD/USD pair fell back to around 0.5710 after steadily rising 3.5% in January and February. Despite the correction, the overall macroeconomic background remains favorable for the continuation of the upward movement. According to published statistics, the core retail sales index in New Zealand for the fourth quarter increased by 1.4% on a quarterly basis, which significantly exceeded the forecast of 0.2%. The previous data was revised upward from -0.8% to -0.6%, and total sales for the same period increased from 0.0% to 0.9%, exceeding analysts' expectations of 0.5%.Additional support for the national currency is provided by the prospect of further easing of the monetary policy of the Reserve Bank of New Zealand. The regulator has already lowered the rate by 50 basis points, bringing it to 3.75%, and, according to the head of the department, Adrian Orr, it is likely to reach 3.00% by the end of the year. This means that at least two more stages of decline are possible in the coming months. However, the current weakening of the New Zealand dollar is due to the strengthening of the US currency, which was the market's reaction to statements by US President Donald Trump about the introduction of new duties on copper imports. These measures contribute to the growth of demand for the dollar, putting additional pressure on the NZD/USD.Resistance levels: 0.5795, 0.5928.Support levels: 0.5690, 0.5600.WTI oil market analysisWTI crude oil prices show a multidirectional movement during the morning trading session, consolidating around 69.00 and remaining at the lowest values since December 23, updated the day before. Expectations of a possible diplomatic resolution of the Russian-Ukrainian conflict are putting pressure on the market, which reduces demand for defensive assets, including commodities. The administration of US President Donald Trump is actively promoting initiatives to end hostilities, while simultaneously taking steps to restore diplomatic ties with Russia. The first meetings of the delegations have already taken place in Saudi Arabia, and experts believe that if agreements are reached, a partial revision of the sanctions policy is possible, including easing restrictions on Russian energy exports via sea routes and pipeline systems.Additional pressure on oil is exerted by the resumption of exports of raw materials from Iraqi Kurdistan. On Monday, Iraqi Deputy Prime Minister Hayyan Abdul Ghani announced that supplies would resume after the final approval of technical details with Ankara. According to experts, transportation volumes will amount to about 185.0 thousand barrels per day, which may increase pressure on the market and limit the growth potential of oil prices.Resistance levels: 69.00, 70.00, 71.00, 71.62.Support levels: 68.30, 67.00, 66.00, ...
During Wednesday morning's session, GBP/USD returns to a "bearish" correction. Currently, the pair is testing the 1.2640 level for a downward breakdown, while market participants are waiting for new drivers to appear, continuing to analyze the data published last Friday.Retail sales in the UK in January were higher than expected, supporting the bullish sentiment for the pound. On a monthly basis, the indicator increased by 1.7% after a decrease of 0.6% in December, while experts predicted an increase of only 0.3%. On an annualized basis, retail sales decreased from 2.8% to 1.0%, which is still better than expected at 0.6%. Sales excluding fuel also showed growth: by 2.1% month-on-month and by 1.2% year-on-year, exceeding forecasts of 0.9% and 0.5%, respectively.However, business activity data turned out to be mixed. The UK manufacturing PMI from S&P Global fell from 48.3 to 46.4 points in February, while the market had expected 48.4 points. At the same time, the PMI index in the services sector improved from 50.9 to 51.1 points, exceeding the forecast of 50.8 points.The pace of interest rate cuts by the Bank of England has been the subject of discussion among members of the Monetary Policy Committee. Swati Dhingra, a spokeswoman for the committee, said a gradual rate cut would not necessarily occur in increments of 25 basis points. According to a survey of leading economists conducted by Reuters, most experts expect the regulator to cut the rate several times during the year, with a total reduction of 75 basis points.The US index of business activity in the services sector in February decreased from 52.9 to 49.7 points, which is significantly lower than the forecast of 53.0 points. In the manufacturing sector, on the contrary, the PMI index rose from 51.2 to 51.6 points, slightly exceeding expectations of 51.5 points. The final GDP estimate for the fourth quarter of 2024 and data on durable goods orders for January will be published tomorrow at 15:30 (GMT+2). Orders are expected to rise by 2.0% after falling by 2.2% in December, and orders for capital goods excluding the defense and aviation sectors may adjust from 0.4% to 0.3%.Technical analysis of GBP/USD for todayOn the daily chart, the Bollinger indicator indicates moderate growth. The MACD indicator is turning into a downward trend, forming a new sell signal. Stochastic is showing a more confident decline, which confirms the likelihood of a continuation of the downtrend in the short term.Trading recommendations- Sale: it is advisable to open sales transactions after a confident breakdown of the 1.2600 level downwards with a target of 1.2500. It is recommended to set the stop loss at 1.2650.- Buy: the opportunity to buy will appear in the event of a return of bullish dynamics and an upward breakdown of the 1.2690 level with a target of 1.2800. In this case, the stop loss should be placed at ...
Key economic events and market trendsThe February US consumer confidence index from the Conference Board will be published today, which will give an idea of American consumer sentiment. In addition, Fed representatives Logan and Barkin are expected to speak, who can clarify the regulator's further intentions regarding monetary policy.Investors' attention is also focused on the publication of the ECB's agreed wages indicator for the fourth quarter of 2024. According to forecasts, the growth rate of wages in the Eurozone decreased to 5.0% after a jump to 5.4% in the third quarter, caused by one-time compensation payments amid inflationary pressures. However, this indicator remains volatile, which makes its interpretation difficult.Today, the central bank of Hungary will announce its decision on the key interest rate. According to market expectations, the regulator will keep the rate at 6.5%, which corresponds to the current strategy to keep monetary policy in a stable direction.The People's Bank of China left the annual rate on the medium-term lending mechanism unchanged at 2.0%. This coincides with analysts' expectations, as the regulator continues to wait for new signals from the US Federal Reserve and the development of the tariff policy situation before taking further steps.Against the background of Donald Trump's statement that the imposition of tariffs on goods from Canada and Mexico is proceeding as planned, the US dollar strengthened against the Canadian and Mexican pesos. The White House also confirmed that retaliatory duties may come into force in April, which will affect other countries.Political events and economic indicatorsThe final data on inflation in the Eurozone for January confirmed preliminary estimates: the overall index was 2.5% in annual terms, and the base index was 2.7%. The main reason for the increase was high energy prices, as well as temporary factors related to tariff and service price adjustments.In Germany, the Ifo business climate index in February was below forecasts and amounted to 85.2 (against the expected 85.8). At the same time, the sub-indexes showed an increase in expectations, but a deterioration in the current assessment of the economic situation, which highlights the continuing difficulties in Europe's largest economy.CDU party leader Friedrich Merz hinted at a possible easing of the strict government debt limit in order to expand defense spending. However, this decision must be made in the next 30 days before the formation of a new parliament, otherwise it may be blocked by the AfD and Die Linke parties, which won more than a third of the seats.The UN General Assembly supported the EU and Ukraine's resolution condemning Russia's actions, but the United States proposed an alternative option that did not mention Russian aggression. Donald Trump also said he was in "serious" talks with Vladimir Putin about ending the conflict, but Moscow has not yet confirmed that such discussions are underway in detail.During his visit to the White House, French President Emmanuel Macron noted the possibility of reaching a truce in the coming weeks, indicating an intensification of diplomatic efforts to resolve the crisis.Market dynamics: stocks, bonds and currenciesDespite the positive start to the week, stock markets were unable to maintain growth. MSCI World indexes fell 0.5%, while U.S. stocks came under pressure, and European markets ended the day unchanged. Investors continued to move into defensive assets such as healthcare, real estate and the banking sector, while stocks in the technology and industrial sectors recorded profit-taking. The VIX volatility index rose and approached the level of 20, which indicates increased caution among American investors.In the bond market, 10-year German bunds were trading in a narrow range of 4 bps, as the German election results did not bring unexpected surprises. However, discussions on a possible defense package of 200 billion euros may put pressure on swap spreads in the coming days.The foreign exchange market also remained relatively calm. The US dollar and the Japanese yen came under pressure, while the euro strengthened amid predictable election results in Germany, which did not cause serious market ...
EUR/USD: the market is waiting for the results of the Bundestag electionsThe weakening of the dollar contributes to the strengthening of the euro, as a result of which the EUR/USD pair continues its corrective movement, trading around 1.0518. The European currency was supported by news about the victory of the Christian Democratic Union and the Christian Social Union (CDU/CSU) in the Bundestag elections, where they received 28.6% of the vote. The second place was taken by the Alternative for Germany with a score of 20.8%, while the party of the current Chancellor Olaf Scholz scored only 16.4%. The outcome of the vote could lead to significant changes in the economic and political spheres, including possible fiscal reform promoted by the CDU/CSU. In addition, the election results will have an impact on the EU's position on the policy of US President Donald Trump, in particular on the Russian-Ukrainian conflict and security in Europe.The macroeconomic data, which is expected to be published today at 11:00 (GMT+2), may have an additional impact on the pair's exchange rate. According to forecasts, the consumer price index in January will decrease by -0.3% after rising by 0.4% a month earlier, which in annual terms may accelerate inflation to 2.5% from the previous 2.4%. The base rate is likely to remain at 2.7%, which exceeds the European Central Bank's (ECB) target of 2.0%, but is not yet sufficient to review the monetary policy easing strategy.Resistance levels: 1.0550, 1.0710.Support levels: 1.0470, 1.0290.USD/CHF: Swiss Labor Market report in focusIn the morning trading, the USD/CHF pair shows a moderate decline, updating the lows of February 23 and testing support around 0.8960. Market activity remains subdued, as participants expect new factors to appear that can set the direction of movement.On Monday at 09:30 (GMT+2), data on employment changes for the fourth quarter will be released in Switzerland, where the indicator previously increased from 5.499 million to 5.528 million, continuing the upward trend. On Thursday at 10:00 (GMT+2), investors will receive updated statistics on the country's GDP, and forecasts indicate a slowdown in growth from 2.0% to 1.6% in annual terms and from 0.4% to 0.3% in quarterly terms, which may weaken the franc's position. At 12:00 (GMT+2), the market's attention will switch to eurozone inflation indicators: the consumer price index is expected to be 2.5%, and core inflation is expected to be 2.7%. Meanwhile, Swiss gold exports to the United States increased sharply in January, partially offsetting lower shipments to China and India. The volume of shipments increased from 64.2 to 192.9 tons, which is the highest figure since 2012.The US currency is reacting to the latest S&P Global business activity data. The manufacturing sector index increased from 51.2 to 51.6 points in February, exceeding expectations of 51.5 points, while the same indicator in the service sector fell from 52.9 to 49.7 points, which was lower than the projected 53.0 points. For the first time since February 2023, the value fell below the key mark of 50.0 points, which may indicate the negative consequences of the Fed's long-term high-interest rate policy. However, market participants are still in no hurry to adjust expectations for monetary policy easing, sticking to the forecast of two interest rate cuts of 25 basis points in the second half of the year.Resistance levels: 0.9000, 0.9037, 0.9075, 0.9100.Support levels: 0.8952, 0.8929, 0.8900, 0.8865.GBP/USD: the pair gained a foothold in the target area of 1.2687–1.2659Due to the strong economic performance of the UK, the GBP/USD pair has confidently gained a foothold above the resistance of 1.2525, which indicates the continuation of an upward correction with the potential for growth to 1.2785.Employment statistics for the last three months showed an increase of 107.0 thousand, which is significantly higher than the previous value of 35.0 thousand. The unemployment rate was 4.4%, which was better than expected at 4.5%. Inflation also exceeded forecasts: the consumer price index in January reached 3.0% in annual terms against the expected 2.8% and the previous 2.5%, and on a monthly basis the decrease was -0.1% instead of the expected -0.3%. An acceleration in price growth may force the Bank of England to suspend monetary policy easing, which supports the pound. In addition, a stable labor market suggests that the interest rate will remain high for longer than previously predicted.Resistance levels: 1.2785, 1.3023.Support levels: 1.2525, 1.2300.USD/CAD: Bank of Canada warns about risks to the economyThe US dollar is showing a moderate decline in the USD/CAD pair in morning trading, correcting after a sharp rise on Friday. Quotes are testing support around 1.4190, while market participants are assessing the latest macroeconomic data on business activity and waiting for new factors that can set the direction of movement.Last week, Canada released December retail sales figures, which showed solid growth. On a monthly basis, volumes increased by 2.5% after a modest 0.2% increase in November, exceeding analysts' expectations of 1.6%. Excluding car sales, the figure also beat forecasts, rising 2.7% after a 0.7% decline, while only 1.8% was expected. On Friday, February 28, investors' attention will switch to the publication of GDP data for December and the fourth quarter: growth of 0.3% in monthly terms is forecast after a decrease of 0.2% earlier, as well as quarterly dynamics of 0.3% and annual growth of 1.0%.The head of the Bank of Canada, Tiff Macklem, noted that the regulator has limited opportunities to neutralize the effects of the US administration's trade measures, unlike the period of fighting inflation after the pandemic. According to him, the Canadian economy is unlikely to recover as rapidly as after the crisis of 2020-2022: growth is possible, but production will remain below previous levels. On February 10, President Donald Trump signed an executive order imposing 25% duties on steel and aluminum imports from March 12, including shipments from Canada. In addition, a drop in export earnings due to the sanctions policy may hit consumption levels, while retaliatory tariffs will only increase inflationary risks in the United States.Resistance levels: 1.4250, 1.4300, 1.4350, 1.4400.Support levels: 1.4200, 1.4145, 1.4100, ...
PMI indices for February in most major economies are expected to be published today. Special attention will be paid to data on the Eurozone. In January, the manufacturing PMI rose from 45.1 to 46.6, which was a positive signal after the weak second half of 2024. The manufacturing PMI is expected to remain at 46.8 in February, while the services PMI is expected to rise to 51.6.In Denmark, data on the business confidence index for February will be released today. Despite the decline in January, forecasts point to moderate growth in 2025, as well as an increase in the number of new jobs. Employment data for December 2024 will also be published, which show steady growth over the past year.Federal elections will be held in Germany this weekend. The key theme of the candidates is the recovery of a weakening economy, which makes the outcome of the election important for future growth. The most likely outcome is a coalition between the CDU/CSU Conservatives and the Social Democrats (SPD) or the Greens. In both cases, Friedrich Merz from CDU is likely to become chancellor.There is a 50% chance of debt brake reform, which will increase the structural deficit and boost GDP growth in the coming years. If the reform is not implemented, a similar fiscal incentive can be achieved through targeted extra-budgetary funds.Economic and market newsJapan: The core consumer Price Index (CPI) excluding fresh food turned out to be slightly higher than expected, amounting to 3.2% in annual terms. This strengthens the case for further rate hikes by the Bank of Japan. Kazuo Ueda, the head of the regulator, noted that additional rate cuts depend on an improvement in inflationary dynamics, and also indicated a willingness to increase the purchase of government bonds in the event of an increase in long-term interest rates.Denmark: The consumer confidence index dropped to -14.5 in February from -11.7 in January. The weak data is linked to concerns about the economy and uncertainty surrounding Donald Trump's policies. However, citizens' personal finances are improving due to rising real wages, a strong labor market, and a stable housing market.Denmark's GDP grew by 1.6% in the fourth quarter and 3.6% for the whole of 2024, mainly due to the pharmaceutical industry. Excluding this sector, growth would have been 1.8%, while private consumption increased by only 0.9%.Eurozone: The consumer confidence index rose to -13.6 in February (forecast: -14.0), which was the second consecutive month with an improvement in the indicator. However, confidence remains well below the October level. Consumers are concerned about the possible impact of Trump's policies on Europe, despite improved economic conditions such as rising real incomes and lower interest rates.Stock, bond and currency marketsStocks: Risk appetite continues to decline. European indices started the day with growth, but declined after the opening of trading in the United States. The S&P and Stoxx lost 0.5%, while the Russell 2000 lost 0.9%. This is the first decline in European stocks since early January. Convincing macroeconomic data confirming Europe's recovery is needed to continue the rally.Bonds: Fed official Kugler made hawkish statements, noting that employment risks have decreased and inflation remains high. Today's PMI data may affect expectations regarding future ECB decisions.Currencies: The US dollar weakened against most G10 currencies, despite a decrease in risk appetite. The EUR/USD pair approached 1.05, while USD/JPY dropped below 150 and reached its lowest level since the beginning of the year. EUR/GBP is consolidating below 0.83, while EUR/SEK remains below ...
EUR/USD: pressure on the euro has increased due to the negotiations between Russia and the United StatesThe EUR/USD pair shows mixed fluctuations during the Asian session, holding near the level of 1.0450. Market activity remains weak as investors wait for new factors to appear that could affect the exchange rate. The attention of bidders remains focused on the situation surrounding the Russian-Ukrainian conflict, as well as the potential consequences of the first negotiations between the United States and Russia, which recently concluded in Saudi Arabia. Analysts evaluate their results cautiously, noting that, despite hopes for a softening of the confrontation, there remain risks of marginalizing the role of the European Union in this process, which may exacerbate political instability, especially in France and Germany.Macroeconomic statistics for the eurozone, published the day before, gave mixed signals, but reports from the Center for European Economic Research (ZEW) made a small positive. In Germany, the business confidence index rose from 10.3 to 26.0 points in February, exceeding the forecast of 15.5 points, and the assessment of current economic conditions rose from -90.4 to -88.5 points against the expected -90.0 points. In the eurozone as a whole, economic sentiment improved from 18.0 to 24.2 points, although preliminary estimates suggested 24.3 points. According to a Bloomberg survey, most analysts believe that the European Central Bank (ECB) will cut the interest rate below 2.00% by early 2026, despite previously expected three consecutive cuts of 25 basis points in 2025, from the current 2.75% to 2.00%. Experts note that the neutral level of the key rate, at which it does not have a restraining or stimulating effect on the economy, is estimated in the range of 1.75–2.25%. At the same time, any further steps taken by the regulator will depend on a detailed analysis of the macroeconomic situation and key indicators.Resistance levels: 1.0467, 1.0513, 1.0554, 1.0600.Support levels: 1.0434, 1.0400, 1.0350, 1.0300.GBP/USD: annual inflation in the UK rose to 3.0%Against the background of the stability of the British currency, the GBP/USD pair failed to develop an upward movement and remains near the 1.2617 mark during the Asian session.In January, the dynamics of inflation in the UK showed mixed results: the consumer price index decreased from 0.3% to -0.1% on a monthly basis, while in annual terms the indicator increased from 2.5% to 3.0%. The achieved value significantly exceeds the Bank of England's target limit of 2.0%, which may complicate plans to ease monetary policy. Core inflation, excluding the impact of food and energy prices, accelerated from 3.2% to 3.7% year-on-year. Taking into account the neutral employment report, where the unemployment rate remained at 4.4%, experts predict that at the March 20 meeting, the British regulator will keep the key rate at 4.50%.Resistance levels: 1.2680, 1.2890.Support levels: 1.2570, 1.2330.USD/JPY: the pair went down, breaking through the support of 153.23–152.69The USD/JPY pair rose to the level of 151.70 after the publication of macroeconomic statistics from Japan at the beginning of the week.According to the results of the fourth quarter, gross domestic product (GDP) grew by 2.8% year-on-year, which significantly exceeded the projected 1.0%. The previously published value was revised upward from 1.2% to 1.7%. On a quarterly basis, the indicator increased to 0.7%, while preliminary expectations were 0.3%, and adjusted data for the previous period changed from 0.3% to 0.4%. Against this background, the USD/JPY pair sank to the support level of 151.30. At the same time, exports accelerated from 2.8% to 7.2% in January, but fell short of the projected 7.9%, while imports increased from 1.7% to 16.7%, exceeding analysts' expectations of 9.7%. This led to an increase in the trade deficit to -2758.8 billion yen from 132.5 billion previously, while forecasts suggested a decrease to only -2100.0 billion yen. On Friday at 01:30 (GMT+2), the publication of inflation data for January is scheduled, where the annual consumer price index may reach 3.7%, and the base indicator is 3.1%. The expected values can strengthen the yen exchange rate, as they will create additional conditions for further tightening of monetary policy by the Bank of Japan.Resistance levels: 156.47, 158.88.Support levels: 151.30, 149.57, 144.90.Gold market analysisThe XAU/USD pair is showing a slight decline near the 2935.35 mark, remaining in the area of historical highs recorded at the beginning of last week. A day earlier, gold was steadily rising in price, helped by an increase in interest in protective assets amid expectations of monetary policy easing by the world's largest regulators. This week, the Reserve Bank of Australia and the Reserve Bank of New Zealand announced a review of lending conditions, with the latter immediately reducing its key rate by 50 basis points, as predicted.Investors are closely monitoring the development of diplomatic processes aimed at resolving the Russian-Ukrainian conflict, as serious geopolitical risks remain along with hopes for its completion. In particular, there is a possibility that the White House may impose additional duties on European imports due to the divergence of positions between the EU and the United States on the terms of the end of hostilities. The rapid resolution of individual issues can, in turn, lead to new crises, especially in politically tense countries such as Germany and France.Resistance levels: 2942.65, 2965.00, 2980.00, 3000.00.Support levels: 2920.00, 2900.00, 2875.00, ...
Today, investors' attention is focused on the most important macroeconomic and political events. In Sweden, the results of a survey of inflation expectations conducted by the Origo group (formerly Prospera) are being published. The Riksbank focuses on the need to keep long-term (5–year) inflation expectations close to the target of 2%, which has been stable in the range of 1.9-2.1% since the beginning of 2024. We do not expect any sharp deviations from these values this month.In the UK, inflation data for January is on the agenda. Both the general price level and the base indicator are expected to rise, which is facilitated by higher prices for fuel and educational services. Service inflation is projected to rise to 5.1% against the expected 5.0%. This will be the last inflation report before the March meeting of the Bank of England, where markets do not attach much probability to a rate cut. Analysts believe that the next interest rate cut is possible only in May.This morning, China is publishing data on new home prices, which serve as an important indicator of the state of the real estate market. Recent reports show that the rate of price decline has slowed, which is in line with other indicators indicating a moderate recovery in housing demand. We expect prices to remain at about the same level in January as in December, indicating market stabilization.Market news and recent eventsIn the United States, President Trump has announced plans to impose tariffs of 25% on automobiles, pharmaceuticals, and semiconductor chips. Although no specific date has been announced for the start of tariffs, he also confirmed the launch of tariffs on steel and aluminum from March 12. The markets will try to assess the sincerity of these statements today.Regarding the situation in Ukraine, American and Russian officials held their first meeting in Saudi Arabia aimed at ending the war – without Ukraine's participation. Both sides agreed to lay the foundations for future cooperation, with discussions on territorial arrangements and security guarantees expected in the future. Putin's foreign policy adviser noted that the United States and Russia are working on preparing a meeting between Trump and Putin.Sweden has published a detailed inflation report for January, which showed annual CPI growth slightly below expectations – 0.9% against the projected 1.0%, with a monthly change of 0.0%. At the same time, the CPIF baseline indicator excluding energy confirmed a preliminary value of 2.7% per annum, which may signal an increase in inflationary pressure.The UK has released a report on the labor market for December and January, where the unemployment rate remained stable at 4.4%, and the number of people employed exceeded expectations, largely due to data on the public sector. This indicates that the Bank of England is likely to continue its cautious easing policy.In Germany, the February ZEW index rose above expectations, reaching -88.5, the highest in four months, while expectations for future market improvements increased to 26.0, significantly exceeding the forecast of 20.0. These data indicate the continuation of positive surprises in the German economy, despite the general stagnation, which, in turn, is a signal of stability.Market analysisStock markets continued their moderate growth. Yesterday, assets increased slightly despite the fact that the American stock exchanges were closed. European markets added about 0.5%, setting a new closing record for the year, and shares in the defense sector rose especially noticeably – Swedish SAAB recorded an increase of 16% per day and 30% per week. Markets in Asia are also showing strong positions, with South Korean stocks up 2% and some countries seeing significant annual gains of up to 10%. US index futures are slightly higher today.The debt market in Europe is experiencing an increase in government spending on defense and assistance to Ukraine. The EU is considering various financing mechanisms for these costs, which has caused government bond yields to rise, although spreads between peripheral and central countries remain narrow, indicating there is no clear desire to flee to safety.In the foreign exchange market, the Japanese yen showed the best dynamics among the G10 currencies, which was facilitated by the strong growth of the Japanese economy in the fourth quarter of 2024. EUR/USD is holding just below 1.05, while USD/CAD has stabilized around 1.42 following the release of Canada's January CPI, in line with expectations. The EUR/GBP exchange rate dropped to 0.83, and the following changes are observed in the Scandinavian region: EUR/SEK dropped below 11.22, and EUR/NOK – below 11.64. These movements indicate continued pressure on regional ...
EUR/USD: EU assesses risks from new US trade tariffsThe EUR/USD pair maintains a corrective trend near the 1.0456 mark, awaiting the release of fresh macroeconomic data, while the fundamental background remains neutral.The administration of Donald Trump postponed the introduction of tariffs on European imports until April, which, according to analysts, will not have a serious impact on the EU economy: steel and aluminum supplies from the region account for only 2.0% of the total, and the value of American exports already exceeds European, even without new duties. ECB board member Fabio Panetta believes that the US tariff policy will not lead to an increase in inflation in the eurozone, but its possible slowdown below the target level of 2.0% requires special attention from the regulator. At the same time, the head of the Bundesbank, Joachim Nagel, warns that the German economy may be the most vulnerable to trade restrictions from the White House.Against the backdrop of the US Presidential Day celebrations, the dollar showed low volatility, and the Fed's monetary policy remains a key factor for the market. On Wednesday, the minutes of the January meeting of the regulator will be published, where investors hope to find hints on the timing of a possible interest rate cut. Meanwhile, inflation in the United States is showing the fastest growth rates in the last 18 months, and according to the CME FedWatch Tool, the probability of maintaining the rate in March is estimated at 97.5%, which contributes to the stability of the dollar.Resistance levels: 1.0510, 1.0680.Support levels: 1.0420, 1.0280.GBP/USD: the head of the Bank of England announced the stagnation of the country's economyThe pound is correcting downwards in the GBP/USD pair during morning trading, playing back the growth of the previous day, when quotes updated the maximum since December 19. The instrument is testing the 1.2600 level for a breakdown, while investors are waiting for fresh data on the British labor market. According to forecasts, the average wage in December may accelerate from 5.6% to 5.9%, unemployment will increase from 4.4% to 4.5%, and the number of applications for unemployment benefits from 0.7 thousand to 10.0 thousand.Market participants' attention is also focused on the upcoming speech by the head of the Bank of England, Andrew Bailey, at 11:30 (GMT+2), where he may announce possible steps by the regulator regarding the interest rate. Earlier, the official described the country's economic growth rate as "static", despite unexpectedly strong data for the fourth quarter of 2024.: GDP increased by 0.1% instead of the expected decline, and year-on-year growth was 1.4% against the projected 1.1%. However, the Bank of England revised its GDP expectations for 2025 from 1.0% to 0.75%, and during its last meeting on February 6, it lowered the interest rate by 25 basis points to 4.50%, expecting inflation to rise to 3.7% in the third quarter.Tomorrow at 09:00 (GMT+2), January UK inflation data will be released on the market: analysts expect an increase in the annual consumer price index from 2.5% to 2.8%, while a correction of -0.3% is possible in monthly terms. The base index is expected to accelerate from 3.2% to 3.6%. Retail sales reports will be released on Friday at 09:00 (GMT+2), and February business activity statistics from S&P Global will be released at 11:30 (GMT+2). The index in industry is expected to rise to 48.5 points from 48.3 points, and in the service sector to 51.0 points from 50.9 points. Expectations for similar American indicators suggest a continuation of the level of 51.2 points in the manufacturing sector and an increase in the services index from 52.9 points to 53.2 points.Resistance levels: 1.2650, 1.2700, 1.2730, 1.2776.Support levels: 1.2600, 1.2550, 1.2500, 1.2450.USD/CHF: quarterly growth of Swiss GDP was 0.4%The USD/CHF pair continues to develop upward dynamics, having tested the 0.9030 level for an upward breakout during morning trading. Markets remain waiting for new drivers, as the American stock exchanges were closed the day before due to the celebration of Presidential Day. Investors are analyzing Friday's reports: retail sales in the United States in January decreased by 0.9% month-on-month against a forecast of 0.1%, and annual growth slowed from 4.4% to 4.2%, while industrial production fell to 0.5% against forecasts of 0.3%.In Switzerland, the producer and import price index decreased by 0.3% year-on-year in January, but showed an increase of 0.1% over the month. Today, market participants' attention is focused on industrial production data for the fourth quarter, where the indicator is expected to remain at 3.5%. Additional support for the franc was provided by information on the growth of Swiss GDP by 0.4% in the fourth quarter, which confirms the stability of the national economy, despite the slowdown in annual growth to 0.8% from 1.2% in 2023. The final estimate of the indicator will be presented on February 27.Resistance levels: 0.9037, 0.9075, 0.9100, 0.9130.Support levels: 0.9000, 0.8964, 0.8929, 0.8900.NZD/USD: experts expect RBNZ rate cut to 3.75%During the Asian trading session, the New Zealand dollar is significantly losing ground, falling to the area of 0.5705. This movement reflects a correction after the recent sharp rise, when the NZD/USD pair updated the maximum values recorded on December 18.At the same time, large-scale emigration is observed in New Zealand: the total number of citizens who left the country, including those who returned, reached 47.0 thousand, whereas a year earlier this figure was 43.3 thousand. According to Fortune, the vast majority of expats chose to move to Australia, hoping for broader career prospects abroad. With the Reserve Bank of New Zealand having already lowered its key interest rate by a total of 125 basis points since August last year, the regulator has yet to step up measures to support the economy, which is under pressure due to rising unemployment and the effects of the recession. According to a survey of economists conducted by Reuters, at the next meeting, the agency is likely to reduce the indicator by 50 basis points, bringing it to 3.75%. Moreover, analysts predict an additional rate cut of 75 basis points over the course of the year. Investors are also expressing concern about a possible increase in the tariff policy of the Donald Trump administration, which could hit New Zealand's export-oriented sector. Earlier, the American president announced 25 percent duties on aluminum and steel imports, as well as counter-sanctions against countries that restrict access to American goods on their markets.Resistance levels: 0.5723, 0.5750, 0.5775, 0.5800.Support levels: 0.5700, 0.5672, 0.5650, ...
The foreign exchange market is better known as Forex or FX. Trading in this market has become very popular in recent years. However, this is not the case - Forex trading raises a number of questions. For example: what is the foreign exchange market? Which currency pairs are best to trade? Is currency trading risky? Some of the answers to these questions will be found in this article.What is the Forex market?The foreign exchange market is also called the Forex market or the English foreign exchange market. It is simply a market where currencies are exchanged. According to the Bank for International Settlements (BIS), the foreign exchange market is the largest market in terms of total volume, with up to USD 5 trillion traded daily. It is not a physical place, but rather an electronic network where institutions or individuals trade with each other.The left-hand currency is called the base currency and the right-hand currency is called the quote currency. The second currency indicates the value relative to 1 unit of the base currency. For instance, the formula EUR/USD = 1.4000 implies that EUR/USD trades at 1.4000, i.e., 1 Euro has a value of $1.40. The first currency is always expressed in the second currency. USD/JPY at 110.50 means that one USD is worth JPY 110.50. EUR/USDWhat are the best currency pairs to trade?The best currency pairs to trade effectively depend on your trading style. If you have a short term strategy, for example, if you like to scalp, then the major currency pairs will be most profitable for you because of the low spreads.On the other hand, for a fundamental trader, smaller currency pairs will be of interest based on long-term analysis. The most profitable currency pairs may be those involving the Australian dollar, Japanese yen or Canadian dollar.The best forex currency pairs:EUR/USD: this pair has the lowest spread and is not very volatile.GBP/USD: this pair is interesting in terms of spreads and possible gaps, but it is quite volatile.USD/JPY: this pair has low spreads and offers some interesting possibilities. GBP/USDHow to get started trading currencies online?To start trading currencies online, follow these steps:- Choose a regulated and reputable broker- Choose a broker by the quality of execution of trading instructions- Decide on the trading style that suits you best (scalping, intraday trading, swing trading - you keep your position open for several days)- Determine the appropriate leverage effect in the stock market according to your strategy and experience.- Do not invest more than you can afford to lose.- Choose an intuitive, simple and secure trading platform such as MetaTrader 4.- Try all the above steps on a demo account, before trading live.Read more: Features of intraday trading on the Forex marketGoldIs online currency trading dangerous?Like any financial investment, currency trading online is subject to risks. However, there are different methods to control these risks:- Determine the price of the currency pair at which you want to close a position if developments are unfavourable (for example, if you buy and the price falls, or if you sell and the price rises),- Determine the size of the trade so that your potential loss should not exceed 2-3% of your capital per trade,- Estimate your risk/return ratio (loss/profit) before you open the trade. By default you should have a greater potential for profit than loss, e.g. risk 50 pips, but try to make a profit of e.g. 100 pips.For proper money management and risk reduction it is advisable to start trading on a demo account and try things out on the dirt first. Such an account will allow you to trade in real market conditions, but with fictitious capital, so that you have a complete understanding of the foreign exchange market without any risk.Read more: Forex broker: how to choose a good ...
In the foreign exchange market, the GBP/USD quote (the British pound against the United States dollar) is among the four most liquid instruments.Traders call the pair the word "cable". This jargon seemed to have arisen in the interval when the values of quotations were sent from the Old World to the New through a special wired highway passing through the bottom of the ocean.GBP/USD forecast (online) for todayIn one day, the pair passes from 150 to 200 points, therefore it is considered very mobile, it should be traded with all caution and foresight. The forecast for GBP/USD is based on 20 indicators and shows a fairly accurate picture.General characteristics of GBP USDThe total share of the pair's trading turnover in the foreign exchange market is about 14%.The quote demonstrates how much American dollars should be paid to buy one pound sterling.The GBP/USD exchange rate is characterized by sharp, emotional movements. Volatility is significantly higher than other pairs, for example, twice ahead of the swings of EUR/USD. When calculating the stop-loss level, it is necessary to take into account this feature of the quotation and focus on the furthest highs and lows that are only possible in the considered interval of the price chart.Factors of influence on GBP USD and what the exchange rate depends onThe forecast for GBP/USD should be checked with your own analysis, and in order to conduct it yourself, you need to know the factors influencing the currency pair.The decisions of the Monetary Policy Committee of the Bank of England (an analogue of our Central Bank) have an important impact on the GBPUSD rate. It is this state body that regulates the establishment of official interest rates. The committee consists of 9 people who represent both employees of the Bank of England, including its chairman, and independent experts.Meetings and publication of their results take place monthly. The decision is published on the second day after the start of the work of the ministers. This happens at 16:00 Moscow time. Directly voting on decisions and official resolutions are made on the second day. In two weeks, a detailed countdown of the meeting is provided, including the points of view of the majority and minority of the voters.The quarterly "Inflation Report" and the "Quarterly Bulletin" can be distinguished from official documents.The first document describes in detail the possibilities of economic growth and the target inflation rate in the next 2 years. The second report includes the results of the current monetary policy and the prospects for the development of the UK economic system.Changes in the rates of the US Federal Reserve and the UK Monetary Policy Committee are reflected accordingly in the quotations of national currencies. Investors who have started working with this pair should be advised to enter the position in small lots and closely monitor the volume of transactions taking place. The price does not hold the overcome levels well, so GBP/USD very often rolls back, even after overcoming strong resistance lines. This feature is largely due to the fact that GBP/USD is noticeably suffering from low liquidity.The correlation of GBP/USD with another currency quote – EUR/USD is always noticeable. This connection is very logical, because the euro also stands on the side of the Europeans, sharing all the main news affecting the currency quotes of the EU member states.Read more: How much can you really earn on the Forex marketHow best to trade on the GBP USD currency pairThe GBP/USD currency pair has a ticker identical to its name. Most forex brokers have this tool in their arsenal, so there should not be any problems with finding this tool.The minimum lot, according to interbank standards, is 100,000 GBP. Naturally, the broker makes it possible to work with fractional parts.The spread is approximately 0.00005 - 0.00015.The trading session with this instrument coincides with EUR/USD, which allows you to work seamlessly with quotes.Given the dynamics of the pair and its predisposition to long trends, Moving Average indicators should be used in combination with power indicators, among which the most relevant are RSI and MACD. The Ichimoku indicator works successfully to determine the price levels of support and resistance on a currency pair. Also, as a more functional alternative to the RSI indicator, you can use Stochastic, which determines the oversold and overbought levels in the foreign exchange market.A sign of professional trading is a combination of technical and fundamental analysis data to open a position. This is also true for the GBP/USD pair.One of the interesting ways to make money on a currency pair is trading digital options. This is a very simple tool based literally on two buttons - UP and DOWN.Read more: Key participants of the forex marketFeatures of the currency pairEngland officially has a market economy with limited state control. The economy of the United Kingdom is the largest in the world and ranks sixth. In Europe, in terms of economic indicators, the UK is overtaken only by Germany. The Government includes the Treasury, which is headed by the Chancellor, who is responsible for the creation and implementation of economic and social policy by the British government.The Bank of England acts as the central bank of the island kingdom and is responsible for the issue of pounds sterling. Any news concerning these organizations can significantly change the dynamics of the GBP/USD exchange rate.The pound is the 3rd largest reserve currency in the international economy, after the euro and the dollar. Since 1997, the Monetary Policy Committee has been responsible for publishing the key interest rate at the required level. In fact, the responsible person is the Chancellor of the committee.GBPUSD is a complex currency pair that is very closely interrelated with EUR/USD. At the same time, it lacks such high liquidity, the lack of which translates into increased volatility. Nevertheless, working with GBP/USD is a great chance to increase or strengthen the position already opened on EURUSD. Technical analysis shows relative efficiency. Unjustified price breakouts in any direction will force the trader to adjust his strategy all the time, and will not allow him to earn on one trading idea for a long time.Read more: What time is better to trade ...
According to the general opinion, the origin and functioning of monetary systems are among the most difficult to understand issues of economic theory. In this situation, it is important at the initial stage to give clear and functional definitions of the basic concepts.Types of moneyMoney is considered to be assets that perform the functions of a means of circulation, account units and savings funds. Depending on the method of issue, three types of money can be distinguished:commodity moneycredit moneyfiat money.Commodity moneyCommodity money has been known since ancient times. Their value was determined by the value of the material from which they were made. Commodity money played an important role in metal monetary systems.Credit moneyCredit money (inside money) appeared with the emergence of the first banks. They were debt obligations of banks – banknotes or deposits. Their value was secured by the assets of the issuing bank. Credit money was important in countries where there was no state monopoly on the issue of money.According to the alternative history of money, the first money is often considered to be debts on commodity loans – they were used as a unit of account. After a while, the temples (as organizations that enjoyed unconditional trust) began to recognize these debts, and they became a means of circulation. Subsequently, with the emergence of large-scale production, for the organization and launch of which large-scale investments were required, money-debts turned into a full-fledged means of accumulation.Thus, according to representatives of the alternative concept, metal coins, traditionally considered "universal equivalent" and "real money", appeared later than debts and were derivatives in relation to them. An alternative history of money can provide another explanation for the development of the monetary sphere in the past, as well as its features in the present. According to this version, banks are not "money warehouses", but buyers of debts. Recognizing debts, modern banks, like temples in ancient times, turn them into money accepted by everyone. To do this, they do not need to accumulate goods (precious metals) or other types of means of payment.The basis of the value of a loan is the creditworthiness of its counterparty, that is, the confidence that the counterparty will repay its debt on time. This confidence was provided by organizations that, thanks to their reputation, massively accepted (bought) debts: in ancient times – temples, later – banks. The value of the accepted debts was ultimately given by the state:in the law, these funds were declared a national monetary unit, they were guaranteed state support;they were taken into account for the payment of taxes;citizens were obliged to repay their debts to each other with them.Fiat moneyFiat money or fiat currencies (outside money, from Lat. fiat - decree, instruction) were issued by the state in the form of treasury notes. Their value was based on trust in the state. With the emergence of the state monopoly on the issue of credit money created by banks, they were equalized in rights with fiat money. Therefore, all modern money can be considered fiat.Their value is based on trust in the monetary system as a whole. The state, represented by the central bank, not only issues cash, but also maintains confidence in non-cash money that banks create. In the future, we will use the term "fiat money" in relation to all modern money that is not provided with goods or other material values.Modern fiat money can be cash or non-cash. Cash and non-cash money can be exchanged in a ratio of 1:1. With the development of financial technologies, the popularity of cash is decreasing. The basis of the money supply in modern fiat money systems is non-cash money.From time to time, the attention of researchers and the general public is attracted by assets that can perform certain functions of money. Since the mid-2010s, cryptocurrencies issued by the private sector have been claiming this. Cryptocurrencies have separate properties of commodity and credit money.Digital currencies of central banks (central bank digital currencies) is one of the widely discussed projects in the field of monetary circulation in the early 2020s. If they fully perform the functions of money, by their nature they will belong to fiat money.Issue of fiat moneyIn metal monetary systems, the size of the issue is limited by bank reserves (liquid assets of banks). In fiat systems, such restrictions disappear. But it does not follow from this that the issue of fiat money is not limited by anything.Today, the credit activity of commercial banks is influenced by:interest rate policy of central banks;regulatory standards and measures aimed at achieving financial stability;strict limitations of modern banking risk management.Why did states switch to fiat moneyThe gold standard once played a certain positive role, contributing to the development of world trade and industry. At the same time, he had serious shortcomings:the flow of gold between countries, accelerated by higher rates, led to periodic crises;the more countries switched to the gold standard, the more gold was lacking;under the conditions of the gold standard, the central bank could not adequately perform the functions of a lender of last resort.The emergence of fiat money systems solved the problem of the lack of "money metal". But from the very beginning there were risks:for price stability - historically, the state has a reputation for "living beyond its means";for financial stability, fiat emission can lead to bubbles, and due to the growing interdependence of national economies, crises are becoming more "contagious".Maintaining financial stability for 2021 is still an unresolved ...
Scalping or scalping is a strategy that makes many demands on traders. Perhaps the most serious of them is to accept that everything you think you know about Forex trading will be wrong in this context.Forget about it. Scalping is an opportunity to quickly make money on price changes when transactions last 5-10 minutes.Avoid "political" currenciesDo you want to make money by trading a large amount of money in anticipation of some serious movement? No, scalping is earning money on small price movements. And, what is even more likely in relation to the Forex market, it is worth forgetting about searching for highly volatile pairs in the hope of getting a big profit. George Soros managed to do this in 1992, and you can try to repeat it on a smaller scale, but this will be an example of ordinary trading, not scalping.Successful scalping is based on the use of relatively insignificant price movements. And it depends on a good and thorough analysis of the relevant currencies.First, which currency pairs to choose for scalpingHighly "political" or inflation-prone currencies are not suitable in this context, because they are likely to be very volatile, and high volatility should be avoided.Read more: Volatility: types, how to track and how to useLanguage barriersIt is much better to find a currency pair that is relatively stable, so that its movement can be analyzed and predicted.The obvious candidate would be the EUR/USD exchange rate. This is the most popular currency pair in the world, for which the most transactions are made, and it has many functions that we need.But it has drawbacks.First, it may seem at first glance that these two currencies are, by and large, equivalent. Both are equally popular, issued by developed democratic states, controlled by independent central banks, but in fact they are not comparable.Read more: Causes of inflation and scientific approaches to their studyThe dollar is the currency of a successful political union, it is supported by the federal government and the national treasury, and the central bank, the Federal Reserve System, enjoys broad public support. The euro, the currency of 19 national states, is not supported by the federal government, is prone to crises, as can be seen from what happened to Greece after the 2008 financial crisis, and its management is often criticized.The second drawback is the complexity of the analysis of the European Central Bank, unlike the Fed. There are many, many variables; the position of individual members of the board of directors, the demands of the" southern", poorer countries, the position of the European Commission, which is responsible for economic affairs, and the wishes of Germany, a powerful economy of the European Union.This is compounded by various language barriers that need to be overcome when studying the statements of those who determine the behavior of the ECB.Finally, the ECB is much more autonomous than the Fed.Perhaps the USD/JPY pair may be a more suitable option? The Japanese currency, like the dollar, is the currency of a single state, and the two economies conduct extensive trade with each other. But the language barrier is even more pronounced, and the Bank of Japan is not independent, which means that it is potentially open to political interference.Read more: The European Central Bank (ECB)Communication across the AtlanticThe best candidate for scalping may be USD/GBP. The Fed and the Bank of England are independent but accountable central banks, there is no language barrier, and the legal systems of the two countries are very close.The recent dynamics of the pound against the dollar was quite high, which gives scalpers the opportunity for significant profits. The reasons for this movement include the signing of a trade agreement with the European Union and hopes for the recovery of the UK economy.To predict strong movements in the short term, traders need a thorough and constant analysis of the factors that affect the movement of currencies: economic expectations, fiscal policy and, of course, interest rates. Scalpers will be helped by the fact that both countries have the same attitude to economic management, giving priority to a strong private sector, competitive tax rates and high growth rates.Plus, the US and the UK have a long history of bilateral inter-Atlantic trade.Transactions with GBP/USD may lack the attractiveness of exotic currency pairs, but scalping is not an adventure in the Forex market, but a way to make a profit.Read more: Rich history of the Bank of ...