|08:30||AUD||RBA Gov Lowe Speaks|
|08:30||GBP||Manufacturing Production m/m||0.0%||0.3%|
|08:30||GBP||Goods Trade Balance||-12.7B||-11.9B|
|12:45||USD||FOMC Member Harker Speaks|
|01:30 (Sept 9th)||CNY||CPI y/y||1.4%||1.7%|
|01:30 (Sept 9th)||CNY||PPI y/y||5.5%||5.7%|
European Central Bank monetary policy meeting was the key event of the day. The ECB kept interest rates unchanged, but raised their growth forecast for the EU. Additionally, ECB president Mario Draghi indicated further information on the tapering of the current bond buying stimulus program would come later in October. Additionally, the ECB lowered its inflation forecast through 2019, indicating that interest rates will remain lower for longer than expected previously. Upon the news, both the Euro and European markets posted strong gains, while the British Pound to dropped and helped the FTSE notch its first winning session in four days. Furthermore, the news helped Gold to reach the highest levels of last 12 months. In the U.S., the major indices settled the day mixed and near unchanged levels. Financials were to blame mostly, as banking shares worldwide fell on the ECB decision to keep interest rates at historically low levels, and insurance companies suffered under the thoughts of the potential devastation to come if
In the U.S., the major indices settled the day mixed and near unchanged levels. Financials were to blame mostly, as banking shares worldwide fell on the ECB decision to keep interest rates at historically low levels, and insurance companies suffered under the thoughts of the potential devastation to come if hurricane Irma makes a direct hit on Miami. There was also an air of caution due to North Korea, as there has been speculation that the nation will conduct another ballistic missile test on September 9, and investors don’t want any heavy exposure to risk assets over the weekend if that occurs.
The pair surged immediately following the ECB monetary policy statement, slicing right through the resistance at 1.2000. Euro-Dollar is likely to test the 1.2000 for support, and if it maintains above that level we could see a gain of several hundred pips in the coming weeks, until the pair reaches the next level of solid resistance.
Pound-Dollar continued gaining on the USD for the third consecutive session, breaking above the 1.3100. There is a light resistance just above 1.3125 that the pair will test on Friday, and depending on the trade balance and manufacturing results, we could see GBP/USD move through that resistance or drop back under the 1.3100 level.