Sterling drops sharply today even after BoE raised interest rate as expected. The trigger was the warning that of recession as high inflation hurts real incomes of household and profits of businesses. Aussie and Kiwi are also trading lower as yesterday's risk-on rally fades. Dollar, on the other hand, is regaining some of the post FOMC losses. As for the week, though, Sterling is the worst so far, followed by Franc. Aussie is still the strongest, followed by Loonie. Technically, the development in Sterling is rather bad, with GBP/USD breaking through 1.2410 support to resume medium term down trend. EUR/GBP's strong break of 0.8511 resistance reaffirms that it's in medium term rebound. A focus now is indeed on whether Euro will also follow. Hence, attention will be back on 1.0470 support in EUR/USD. In Europe, at the time of writing, FTSE is up 1.58%. DAX is up 1.56%. CAC is up 1.90%. Germany 10-year yield is down -0.0045 at 0.928. Earlier in Asia, Japan was on holiday. Hong Kong HSI dropped -0.36%. China Shanghai SSE rose 0.68%. Singapore Strait Times dropped -0.17%. |
