Bullet Report: Pound Drops Under 1.30 | USD Remains in Control

Monday was a quiet day for FX markets, with the USD being generally in control, once again. Today’s most important news are from the UK, where the focus still remains the economic impact of exiting the EU. Overall we have UK industrial and manufacturing production numbers for June as well as a preliminary GDP indicator.

Currencies: The GBP broke the 1.30 support level overnight on comments from BoE member McCafferty, where he stated that further easing is required and that the BoE could cut rates even more to 0% and increase the QE program. So far we have seen lows of 1.2970 with the first support at 1.2950. Interestingly, this is the 4th consecutive day of declines for the Pounds since its Central Bank meeting on Thursday. EURUSD is also under slight pressure in what seems to be yet another good day for the USD. Generally, movements in the currency markets could stay muted but there is prospect of further weakness in European majors.

Stocks: US stocks closed lower yesterday, retreating from record highs touched earlier on the day. European stocks finished fractionally higher while in Asian Nikkei soared to 2.4% leading the region in strong gains. The Shanghai Composite Index rose 0.9%. Data released Monday showed Chinese exports continued to fall in dollar terms in July.

Oil and Gold: Oil futures rallied, settling at their highest level in two weeks as OPEC announced that it would hold an “informal” meeting next month to discuss ways to restore stability and order to the crude market. WTI rose $1.22, or 2.9%, to settle at $43.02 a barrel while gained $1.12, or 2.5%, to $45.39 a barrel. Both types of crude settled at their highest levels in roughly two weeks. Backed by a strong USD, GOLD prices tanked to 1331. At these levels speculation of further decline towards $1325 cannot be excluded

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Source:: Bullet Report: Pound Drops Under 1.30 | USD Remains in Control

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