Michael_Stark_Exness

Michael_Stark_Exness

Despite mostly positive data from the UK recently considering the circumstances, the yen remains relatively strong against the pound compared to much of the last quarter. Demand for havens is still high as trade wars between the USA and various other countries continue while participants widely expect the Bank of Japan to continue hiking rates moderately this...

Michael_Stark_Exness

The pound has generally done better against the dollar since around the middle of last month amid moderately strong data from the UK considering the circumstances. Inflation, preliminary GDP and average earnings have all beaten expectations at least slightly this month. Meanwhile the dollar’s long uptrend against various currencies has mostly paused for breath in...

Michael_Stark_Exness

Euro-dollar declined somewhat in the aftermath of slightly stronger American inflation but with relatively low volatility. Central banks’ expected policies in the next few months broadly favour the dollar, but the impact of the trade war is more ambiguous. With $1.02 and $1.05 looking like important areas of support and resistance respectively, EURUSD might be...

Michael_Stark_Exness

Higher inflation and the lower probability of the Fed cutting again in the first half of 2025 has put some pressure on gold despite sentiment overall remaining very strong in recent weeks. Meanwhile various other major central banks such as the European Central Bank and the Bank of England remain more dovish and demand for havens is high amid trade wars and a...

Michael_Stark_Exness

The Bank of England’s meeting on 6 February somewhat overshadowed the NFP for cable given the significance of the announcements then. Although the cut to 4.5% was quite widely expected, the BoE also cut its forecast for growth in half to 0.75% for 2025 while its outlook for inflation rose to 3.7%, much higher than the previous estimate of 2.8%. That the BoE seems...

Michael_Stark_Exness

After an initial reaction downward, gold pushed back up in the aftermath of the job report to retest 5 February’s all-time high. Demand for gold has been consistently high in 2025 so far and the new trade wars between the USA and various other countries have participants somewhat nervous, boosting demand for havens. The current situation close to the all-time...

Michael_Stark_Exness

USDJPY reached a two-month low on 6 February as senior members of the BoJ and the Japanese government commented that inflation is likely to continue rising in the country. Growth in average Japanese earnings remained relatively strong. The BoJ’s next meeting is still more than a month away but, for now, a hike then seems questionable. Japan hasn’t been...

Michael_Stark_Exness

Tariffs and rumours of more to come have affected the euro negatively recently although data from the EU in the last few days have generally been strong. Looking at the big picture, though, the difference in rates between the ECB and the Fed is likely to stay similar or possibly increase in the next few months, so that still seems to be the primary driver of...

Michael_Stark_Exness

Havens in general and gold in particular have been popular in 2025 so far as the new American tariffs loom. However, the main factor driving gold up still seems to be extremely strong overall sentiment. The Fed’s pause of rate cuts and generally good economic conditions in the USA make gold’s fundamentals somewhat shaky while recent nervousness in stock markets is...

Michael_Stark_Exness

The euro has been weak against the dollar in recent months due to diverging monetary policy but also a worse economic outlook in the eurozone. Recent job data and GDP from the eurozone have been mostly negative while the American economy looks strong overall. Threatening tariffs on imports to the USA have affected sentiment, but there’s been no confirmation yet as...

Michael_Stark_Exness

Considering monetary policy alone, it seems questionable whether euro-pound’s recent strong gains are sustainable since the current difference in rates of 1.75% in favour of the pound probably won’t shrink more than 0.2 or 0.3% this year. That said, sentiment on the pound has deteriorated markedly in recent weeks as the British government’s borrowing has...

Michael_Stark_Exness

Monday’s bounce as the USA took a day off for the inauguration was quite vigorous but doesn’t seem to alter the overall technical picture significantly. With the BoE expected to cut about 0.15% more than the Fed this year in total and ongoing concerns about the British government’s budget and the country’s growth, the fundamental situation seems to favour more...

Michael_Stark_Exness

Much stronger GDP and exports from China gave some support to the offshore yuan in the last few days but not enough to realise a notable recovery. There remains some concern over the job market in China while traders are also widely anticipating negativity from new American tariffs in the next few months. USDCNH hasn’t made a clear new high in 2025 and remains...

Michael_Stark_Exness

Gold pushed above $2,700 even in the aftermath of higher American inflation as traders widely expect inflation to accelerate further after new tariffs are introduced and sentiment remains very strong overall. Weaker than expected retail sales in the USA also gave some support to the metal. There were two unsuccessful tests of the area around $2,720 in late...

Michael_Stark_Exness

Most of the time, one would expect rising yields from bonds to boost a currency: British 30-year gilts currently yield nearly 5.5% – a high of more than 25 years. That the pound has continued to decline despite this suggests flight of capital from the UK. High government borrowing and general fiscal instability in the UK are causing concern among many traders....

Michael_Stark_Exness

Gold was among the best performing major instruments in the week ending 10 January, on track to deliver its strongest weekly gains in about two months. New tariffs set by the incoming Republican government of the USA and rising inflation are both key factors in focus. If the price manages to break above the psychological area of $2,700, the next main resistance...

Michael_Stark_Exness

As with euro-dollar, the main fundamental factor recently for dollar-yen has been monetary policy. The Bank of Japan’s recent moderate hawkishness seems more questionable now with real annual wages having fallen recently while the Fed seems to be confirmed to cut only twice this year. The break above ¥158 in the last few days hasn’t led to a clear breakout but a...

Michael_Stark_Exness

Euro-dollar’s long downtrend has paused for breath in January so far as participants digest possibilities for central banks this year. Two cuts by the Fed seem to be more-or-less confirmed for now but there’s still some intrigue as to how low the European Central Bank (‘the ECB’) might go in 2025. Recent expectations suggest three cuts with a chance of about 70%...