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Forex Today: UK falls sharply to 2-year lows

Forex Today: UK falls sharply to 2-year lows

UK CPI data released yesterday came in at an annualized rate of 4.6%, compared to the expected 4.7, and down sharply from the previous month's rate of 6.7%. This created more accommodative expectations from the Bank of England.

➡️ UK CPI (inflation) data came in lower than expected yesterday, showing a sharp drop in the annualized rate from 6.7% to 4.6%, when 4.7% had been widely expected. This will put pressure on the Bank of England to take a more accommodative approach and ultimately cut rates. This weakened the pound a bit.

➡️ After experiencing its worst day in over a year just two days ago, the US dollar has continued to recover and remains within a valid long-term uptrend, although this is not supported by sentiment on the Fed, which is now considered likely to cut rates by 0.50% by July 2024. The dollar's gain was particularly strong against the yen, with the USD/JPY currency pair which rebounded to trade above ¥151.40. This pair will still be attractive to traders following trends on the Long side.

➡️ In the Forex market, the Japanese yen was the strongest major currency since Tokyo opened today, while the New Zealand dollar was the weakest major currency.

➡️ Stock markets look bullish and the best daily trades are likely to be on the Long side of some of the major stock indexes, with the NASDAQ 100 index which seems particularly interesting.

➡️ Crude oil continues to go down, with WTI near its lowest price in 3 months, after rising US crude inventories.

➡️ US PPI data released yesterday was much lower than expected, showing a decline of 0.5%, which is further evidence of a marked decline in inflationary pressure.

➡️ US retail sales data released yesterday was stronger than expected, further demonstrating that the US economy is heading for a soft landing.

➡️ Yesterday's Empire State US manufacturing index data was stronger than expected, which reinforces my previous point.

➡️ Australian unemployment data released today was slightly better than expected.

➡️ There will be a later release of US unemployment claims data.

 

Credit by DailyForex.com

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