Muted Reactions to SNB and BoE Rate Hikes, Dollar Underperforms
| Action Insight Mid-Day Report 3-23-23 |
Muted Reactions to SNB and BoE Rate Hikes, Dollar Underperforms |
Market's response to the rate hikes by SNB and BoE has been relatively muted. Following today's rate decisions, SNB signaled the possibility of further tightening, while BoE remains open to either a hike or a pause in the future. Dollar is currently the day's worst performer, followed by Swiss Franc and Japanese Yen, with commodity currencies showing the most strength. Despite this, a risk-on environment isn't clearly reflected in European stocks and US futures. Regarding the week's performance, Dollar has been the weakest currency so far, primarily due to yesterday's selloff in response to the less hawkish Fed. Commodity currencies are the next weakest, outpaced by their European counterparts. Euro leads as the strongest currency, trailed by Pound and Swiss Franc, while the Japanese Yen presents a mixed performance. Technically, EUR/CAD's up trend from 1.2867 resumed today and it's on track to 61.8% projection of 1.3270 to 1.4640 from 1.4236 at 1.5083. Nevertheless, break of 1.4737 minor support will bring some consolidations first, before staging another rally. The next move might depend on tomorrow's Eurozone PMIs. In Europe, at the time of writing, FTSE is down -0.76%. DAX is down -0.31%. CAC is down -0.26%. Germany 10-year yield is down -0.0485 at 2.281. Earlier in Asia, Nikkei dropped -0.17%. Hong Kong HSI rose 2.34%. China Shanghai SSE rose 0.64%. Singapore Strait Times dropped -0.06%. Japan 10-year JGB yield dropped -0.0283 to 0.306. |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2207; (P) 1.2271; (R1) 1.2333; More... Intraday bias in GBP/USD stays on the upside despite current retreat. Rise from 1.1801 is in progress for retesting 1.2445/6 resistance zone. Decisive break there will resume larger rise from 1.0351, and target 1.2759 fibonacci level. On the downside, break of 1.2177 minor support will argue that corrective pattern from 1.2445 is extending with another falling leg, and turn bias to the downside for 1.2009 support instead. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 08:30 | CHF | SNB Interest Rate Decision | 1.50% | 1.50% | 1.00% | | 12:00 | GBP | BoE Rate Decision | 4.25% | 4.25% | 4.00% | | 12:00 | GBP | MPC Official Bank Rate Votes | 7--0--2 | 7--0--2 | 7--0--2 | | 12:30 | USD | Current Account (USD) Q4 | -206.8B | -217B | -219B | | 12:30 | USD | Initial Jobless Claims (Mar 17) | 191K | 195K | 192K | | 14:00 | USD | New Home Sales Feb | 650K | 670K | | 14:30 | USD | Natural Gas Storage | -75B | -58B |
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