Pound to Euro (GBP/EUR) Forecast: Bank of England (BoE) Decision Today!!
By Josh Jeffery
The Bank of England’s (BoE) June policy decision is this week’s biggest event and is most likely to influence the Pound to Euro (GBP/EUR) exchange rate outlook.
Following last week’s surprising falls in UK inflation and wages, as well as the surprising jump in UK retail activity, investors expect the BoE to give its updated view on Britain’s economy.
If the bank remains optimistic that Britain’s economic situation is still improving and will be more resilient later in the year, the Pound is likely to strengthen as Bank of England interest rate hike bets rise.
On the other hand, if the Bank takes a more cautious stance due to weakening inflation and wages, the Pound could slide further, and BoE interest rate hike bets would fall.
Eurozone data is also likely to have an impact on GBP/EUR trade towards the end of the week.
The Eurozone’s June consumer confidence survey projection will be published on Thursday, and Friday’s Eurozone PMI projections for June would definitely impact the Pound to Euro (GBP/EUR) exchange rate outlook if it surprises.
BOE EXPECTED TO STAND PAT ON MONETARY POLICY
The Bank of England will announce its latest interest rate decision at 1100GMT, where the central bank is expected to keep the bank rate at 0.5%, according to all surveyed economists.
Given that market pricing shows a 93% chance of a Bank of England hold, it is likely that the central bank maintaining rates the bank rate 0.5% is unlikely to impact the Pound. Consequently, with no economic projections or press conference, focus will be on the accompanying minutes.
It is likely that the BoE continues to adopt a “wait and see” approach with their view on near-term rate hikes little changed (limited and gradual rate hikes) from May as they look for further evidence that growth remains on an upward trajectory, following its Q1 disappointment (Reminder, first Q2 growth reading is after BoE August decision). Recent business surveys have seen a modest rebound, which will likely see the BoE maintain its general upbeat assessment and judgment that rate hikes will be needed and in turn should keep GBP supported. However, references to heightened political risks, most notable Brexit which has taken the Pound to a fresh 7-month low, could place GBPUSD under renewed pressure.
US Crude Oil Price May Rise as OPEC Struggles to Reach Agreement
By Martin Essex, MSTA
The Organization of the Petroleum Exporting Countries meets on Friday to discuss an oil-production increase, but an agreement is far from certain, with the Iranian oil minister telling reporters on his arrival in Vienna that he does not believe a deal can be reached.
Saudi Arabia is in favor of a small increase in the second half of this year while Russia, which joins the gathering on Saturday with other non-OPEC members, supports a larger rise. However, Iran’s opposition could scupper an agreement, which has to be unanimous, raising the possibility that Saudi Arabia and its allies would have to go it alone.
That would potentially give crude oil prices a boost after their recent falls.
Cryptocurrencies Fall as Korean Exchange Says $32 Million of Coins Stolen
By Eric Lam
Cryptocurrencies dropped after the second South Korean exchange in as many weeks said it was hacked, renewing concerns about the safety of digital-asset trading venues.
Bithumb, ranked by Coinmarketcap.com as the world’s seventh-largest crypto exchange by traded value, said on Wednesday that hackers stole about 35 billion won ($32 million) and that Ripple was among the coins taken. The exchange halted cryptocurrency deposits and withdrawals, said it will compensate victims and moved investor assets to a so-called cold wallet, which is disconnected from the Internet and less vulnerable to theft.
Bitcoin, the largest cryptocurrency, dropped as much as 2 percent and was trading at $6,616 as of 8:25 a.m. in London, bringing this year’s decline to 54 percent, according to Bloomberg composite pricing. Ripple, Ethereum and Litecoin also retreated, along with some Asia-listed stocks with exposure to digital currencies.
Trade War Winds Accelerate; Dollar Moves Higher, Gold Bearish
By Market Pulse
Gold remains bearishly offered, and It’s all about the dollar strength as the greenback rockets higher on EM commodity and the China meltdown. And at least for the time being the markets have utterly forsaken the idea that the US trade war escalation could become ultimately detrimental for the dollar.
Gold will continue to be sold on rallies in this bullish USD environment.
Netflix hits all-time high over $400 after analyst raises his price target
By Tae Kim | @firstadopter
GBH Insights increased its price target for Netflix shares to $500 from $400, representing 28 percent upside to Monday’s close. It is the highest target of the 36 analysts who cover Netflix.
Netflix shares rose 3.7 percent to $404.98 Tuesday as the rest of the market fell on trade war fears. Its stock is up 103 percent this year through Monday, which is the second-best performance in the S&P 500.
“Our bullish thesis on Netflix is based on our belief that the company’s competitive moat, franchise appeal, ability to increase international streaming customers through 2020, and original content build out will translate into robust profitability and growth,” head of technology research Daniel Ives said in a note to clients Tuesday.