Sterling Mixed Reaction to BoE Rate Hike; Yen Climbs With Dollar
| Action Insight Mid-Day Report 5-11-23 |
Sterling Mixed Reaction to BoE Rate Hike; Yen Climbs With Dollar |
Sterling's response to BoE rate hike has been somewhat ambivalent. Despite BoE's openness to further tightening and a rosier economic outlook, forecast for inflation indicates a marked downturn, with a "material" undershooting expected in the forecast horizon. The voting pattern held no surprises, leaving the Pound now turning its attention to tomorrow's GDP data for potential directional cues. In the broader currency market, Japanese Yen is seeing notable gains in early US session, buoyed by continued decline in US and European treasury yields. Dollar, meanwhile, is capitalizing on risk-off sentiment, as US futures hint at a slightly lower opening. Australian dollar is trailing for the day, with Canadian Dollar and Euro not far behind. However, the final standing will depend on how risk sentiment evolves throughout the remainder of the session. From a technical standpoint, the spotlight now shifts to whether AUD/USD will break 0.6716 support level, indicating rejection by 0.6804 resistance level. If this occurs, it suggests that the consolidation pattern from 0.6563 may have peaked at 0.6817, paving the way for a resumption of larger decline from 0.7156. If this turns out to be the case, it could signal a reversal in commodity currencies as well as risk sentiment. |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2592; (P) 1.2636; (R1) 1.2669; More... GBP/USD is staying in consolidation below 1.2678 and intraday bias remains neutral for the moment. Further rally is expected as long as 1.2434 support holds. Break of 1.2678 will resume larger up trend to 1.2759 fibonacci level first. Firm break there will target 61.8% projection of 1.0351 to 1.2445 from 1.1801 at 1.3095. However, decisive break of 1.2434 will confirm short term topping, and turn bias back to the downside for deeper fall. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:01 | GBP | RICS Housing Price Balance Apr | -39% | -38% | -43% | | 23:50 | JPY | BoJ Summary of Opinions | | 23:50 | JPY | Bank Lending Y/Y Apr | 3.20% | 2.90% | 3.00% | | 23:50 | JPY | Current Account (JPY) Mar | 1.01T | 1.32T | 1.09T | 1.23T | | 01:00 | AUD | Consumer Inflation Expectations May | 5.00% | 4.60% | | 01:30 | CNY | CPI Y/Y Apr | 0.10% | 0.30% | 0.70% | | 01:30 | CNY | PPI Y/Y Apr | -3.60% | -3.20% | -2.50% | | 05:00 | JPY | Eco Watchers Survey: Current Apr | 54.6 | 54.1 | 53.3 | | 11:00 | GBP | BoE Interest Rate Decision | 4.50% | 4.50% | 4.25% | | 11:00 | GBP | MPC Official Bank Rate Votes | 7--0--2 | 7--0--2 | 7--0--2 | | 12:30 | USD | PPI M/M Apr | 0.20% | 0.30% | -0.50% | -0.40% | | 12:30 | USD | PPI Y/Y Apr | 2.30% | 1.40% | 2.70% | | 12:30 | USD | PPI Core M/M Apr | 0.20% | 0.30% | -0.10% | 0.00% | | 12:30 | USD | PPI Core Y/Y Apr | 3.20% | 2.70% | 3.40% | | 12:30 | USD | Initial Jobless Claims (May 5) | 264K | 245K | 242K | | 14:30 | USD | Natural Gas Storage | 78B | 54B |
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