Summary:
- Bank of England raise rates to 0.75% as expected
- Carney press conference sees initial rise in GBP reverse
- Turkish Lira extends loss on US sanctions
- Commodity snapshot
- Crypto mixed as Russian mining sector continues to boom
- Traders look to tomorrow’s NFP release
The Bank of England chose to lift interest rates by 25 basis points at its meeting in August as widely expected ensuring market participants that more hikes would be needed. In effect, the pound jumped slightly but the pair is unlikely to leave its descending channel.
While the initial reaction saw a pop higher in sterling the gains were erased before being reversed during Carney’s press conference. There wasn’t a standout remark that caused the drop, with it appearing to be more a case of a gradual realisation that the bank remains unlikely to embark on a sustained hiking cycle in the current environment.
There is no doubt that the Turkish lira has been among the most beleaguered currencies in the world over the recent months, and this trend seems to be unlikely to reverse any time soon. Yesterday we saw another fresh record low on the TRY after the US imposed sanctions against two Turkish ministers over the continued detention of an American pastor (there had been a warning the US might do so if Turkey did not release him).
Crypto markets a mixed on the day with the most notable move coming in Dash, which has fallen almost 5%. Low electricity prices in Russia have served as an incentive for the crypto mining operations for some time already. The Russian cryptocurrency sector becomes bigger and bigger as it was presented by the recent Russian Association of Cryptocurrencies and Blockchain (RACIB) data.
Our latest commodity snapshot can be found here.
The Fed refrained from changing interest rates in August but an upbeat view on the economy seems to suggest a third interest rates increase this year at the September meeting. This has pushed the EURUSD pair slightly down but the pair remains within a range. Can the NFP report provide a long awaited impulse?
A short video previewing the event can be found here.