Review Brokers
No Result
View All Result
Monday, October 2, 2023
  • Login
  • Home
    • Forex Advertising
    • Economic Calendar
    • Contact Us
  • Forex Brokers
    • Best Broker 2023
  • Education
    • Forex Trading Strategies
    • Forex Trading Indicators
    • Forex/CFDs/Cryptos News
    • Promotional Content
  • Forex Promotions
    • Best Promotions
    • Affiliate Program
    • Forex No Deposit Bonus
    • Forex Demo Contest
    • Forex Rebate (Cashback)
    • Forex Live Contest
    • Forex Deposit Bonus
    • Other Promotions
  • Expert Advisors
    • Expert Advisors Price
  • Rebate Service
    • Terms and Conditions of Rebate Services
  • Home
    • Forex Advertising
    • Economic Calendar
    • Contact Us
  • Forex Brokers
    • Best Broker 2023
  • Education
    • Forex Trading Strategies
    • Forex Trading Indicators
    • Forex/CFDs/Cryptos News
    • Promotional Content
  • Forex Promotions
    • Best Promotions
    • Affiliate Program
    • Forex No Deposit Bonus
    • Forex Demo Contest
    • Forex Rebate (Cashback)
    • Forex Live Contest
    • Forex Deposit Bonus
    • Other Promotions
  • Expert Advisors
    • Expert Advisors Price
  • Rebate Service
    • Terms and Conditions of Rebate Services
No Result
View All Result
Review Brokers
No Result
View All Result

Pound all-time low has market eyeing emergency rate hike

Admin by Admin
September 26, 2022
in Forex/CFDs/Cryptos News
0
gbpusd
0
SHARES
0
VIEWS

(Neil Wilson – Markets.com)

The run on the pound: Sterling plunged to an all-time low against the US dollar in Asian trading before paring some losses as confidence in the UK’s fiscal policy went up in smoke. 

GBPUSD slipped almost 5% to 1.035 in a brutal 20-minute selloff in the early hours, extending its run lower from Friday after the chancellor announced sweeping tax cuts. The judgment of the market to the new fiscal policies is obvious enough; the bond vigilantes have returned with a vengeance. Following the initial sell-off we’ve seen cable bounce back to above 1.07 but it’s clear there is no love for the pound. The FTSE 100 was sharply lower on Friday amid broad based selling of stocks, but the softer pound is giving it some respite this morning as European stock markets trade generally lower. The domestically focused FTSE 250 was about 0.7% lower in early trade as confidence in UK plc evaporates. And there is no let-up in the bond market; gilts are off sharply with the 10yr yield jumping above 4.2%, its highest since 2008, and 2yr north of 4.4%. Very swift and very aggressive repricing in the last two sessions. Ok so markets have a habit of overshooting on the way up and the way down – but gilts and sterling probably have further to go here.

Does the Bank of England intervene? Talk is of an emergency interest rate hike by the Bank to steady the ship. Traders now price in 150bps of hikes by the BoE by November, implying an expectation it comes out with a hike before the next meeting. The central bank is in a tough place and any intervention might only be a sticking plaster as the path of least resistance for the pound is lower; parity gravity. Despite this, to not act would be wilful neglect. Just as the chancellor has taken a reckless approach to fiscal policy – a kind of economic vandalism – the BoE needs to take a very considered approach to monetary policy. Bailey’s tenure will be remembered for this moment. Inter-meeting hikes can look like panic and Bailey is not one to react very swiftly, and direct intervention in FX markets is impossible due to lack of reserves. So, it would need to be a big hike – 100bps would be about right – but then what happens if this does nothing. Jawboning with some hawkish rhetoric might send yields even higher and lead to further pound losses…a tough spot. If the BoE stands idly by as the pound craters it would be as guilty as Kwarteng. But it might hope that sterling rights itself and recovers before it needs to say or do anything: the parity gravity makes this rather risky.

Basic rules for any chancellor: don’t cause a panic in the markets and don’t cause a run on the pound. Simples. But now policy is now adding to volatility…soaring gilt yields (higher borrowing costs) and a falling pound are the worst possible combination for the government and for the UK as a whole and yet that is exactly the macroeconomic path being pursued by the Chancellor and PM. It’s not like there could be any other kind of reaction when gilt issuance needs to rise drastically to fund it all as there are no spending reductions to offset the loss in tax.  

Kwarteng is not exactly doing anything to address the market reaction. He promised “more tax cuts to come” and refused to put a limit on how much the government might borrow. On Friday he said it was a “good day” for the UK. 19 days in and he’s wrecked the gilt market and sent the pound on the run….not an inspiring start. The question is at what point Tory backbenchers turn on the leadership. I reiterate that sparking a run on the pound is the sort of thing that brings down governments – and rightly so! Does Kwarteng even understand how financial markets work? It does not appear he does.

Of course, it’s not entirely sterling and the tax cuts – the euro is also under the cosh and slipped even further overnight as sterling fell. Overnight EURUSD dipped to 0.9550, a new 20-year low, whilst the dollar index rallied above 114 for a new two-decade high. But if we look at euro-sterling, it’s obvious the market is giving the chancellor a thumbs down. Sterling also dropped abruptly against the euro, with EURGBP hitting a two-year high this morning above 0.9250. 

Meanwhile, Meloni’s centre-right coalition heads for a comfortable majority in parliament after voting in Italy on Sunday. There has not been a massive reaction in markets to this since polls have been telling us this would happen for some time. The FTSE MIB is firmer this morning, rallying 0.75% in early trade to outperform peers.  

Brent crude fell below $85 a barrel as markets fretted over the global economic outlook and the dollar surged to its highest since 2002. Brent futures fell to their lowest since January, wiping out all the gains made since the Russian invasion of Ukraine.

Read Euro and pound: Burning [Video]

Post Views: 354

Related posts:

GBPUSDGBPUSD Forecast: Next line of defense aligns at 1.1825 GBPUSDGBPUSD inches to 29-month low, bears dominate [Video] GBPUSDGBPUSD Forecast: Pound remains fragile amid risk aversion GBPUSDGBPUSD Forecast: Pound needs to clear 1.1750 to extend rebound gbpusdStrong NFP data? a good reason for break 0.9900 gbpusdGBPUSD Forecast: Bearish bias stays intact below 1.1550 gbpusdGBPUSD Forecast: Pound struggles to attract bulls gbpusdGBPUSD Forecast: Pound needs to stabilize above 1.1400 to discourage sellers
Tags: European stock marketsForex/CFDs/Cryptos NewsGBPUSD newsThe FTSE MIB
30 USD No Deposit Bonus 30 USD No Deposit Bonus 30 USD No Deposit Bonus
Previous Post

Busy week ahead with central banks’ meetings in the spotlight

Next Post

Euro and pound: Burning [Video]

Admin

Admin

Related Posts

ForexNews
Forex/CFDs/Cryptos News

Economic Headwinds in Europe: Exploring the Lower Trading Figures

July 25, 2023
EUR-USD
Forex/CFDs/Cryptos News

EUR/USD Forecast: Turbulent Times Ahead for the Euro

July 17, 2023
FXcurrencies
Forex/CFDs/Cryptos News

Mastering Murrey Math Lines for Trading USD/JPY and USD/CAD

April 19, 2023
oil
Forex/CFDs/Cryptos News

Navigating the Turbulent Waters of Commodity Markets: Higher Prices and Weaker Margins

April 19, 2023
oil
Forex/CFDs/Cryptos News

Energy Prices Spark Inflation Surge in the US: Expert Analysis

April 17, 2023
Gold
Forex/CFDs/Cryptos News

Gold Forecast: Will it Reach $2040 Again and What are the Risks Involved?

September 11, 2023
Load More
Next Post
EuroPound

Euro and pound: Burning [Video]

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

No Result
View All Result
ADVERTISEMENT
  • Trending
  • Comments
  • Latest
PrimeXBT

PrimeXBT | Step2earn Contest (06.06.22)

May 31, 2022
FBS

FBS | $100 Quick Start Bonus

February 21, 2023
PrimeXBT

PrimeXBT | TradinatoR Contest (27.06.22)

June 6, 2022
xtrade

XTrade | Xmas Season Bonus (26.12.21)

May 24, 2022
CMC Markets

What Is Bitcoin?

52
forexknowledge

What is Forex?

32
Tiomarkets

MT4 vs MT5: What trading platform to choose?

31
CMC Markets

What Is Ethereum?

29
TemplerFX | Grab Your $30 No Deposit Bonus Today

TemplerFX | Grab Your $30 No Deposit Bonus Today

October 2, 2023
Claim Your $30 Free Account with Windsor Brokers

Claim Your $30 Free Account with Windsor Brokers

October 1, 2023
JustMarkets-Grab a Risk-Free $30 Welcome Bonus in Forex Trading

JustMarkets – Grab a Risk-Free $30 Welcome Bonus in Forex Trading

September 25, 2023
Boost Your Profits with OctaFX 50% Bonus Offer

Boost Your Profits with OctaFX 50% Bonus Offer

September 25, 2023

Advertisement

exness

fbs

XM



octafx

icmarkets

XM

Recent Posts

  • TemplerFX | Grab Your $30 No Deposit Bonus Today
  • Claim Your $30 Free Account with Windsor Brokers
  • JustMarkets – Grab a Risk-Free $30 Welcome Bonus in Forex Trading
  • Boost Your Profits with OctaFX 50% Bonus Offer
  • XM Group – How to Claim $30 Forex Welcome Bonus

Connect to ReviewBrokers

facebook twitter telegram
liveinternet liveinternet
Review Brokers

ReviewBrokers Information

Address: Ho Chi Minh City, Vietnam, 70000

Contact us:
– Skype: fxvnpro
– Email:

admin@reviewbrokers.com

reviewbrokers.net@gmail.com

Payment methods:
– Webmoney
– Perfect Money
– Paypal
– Skrill
– Neteller
– Bank Wire
– Bitcoin

Categories

  • Affiliate Program (63)
  • Best Promotions (42)
  • Broker Listing (7)
  • Education (95)
  • Expert Advisors (2)
  • Forex Demo Contest (38)
  • Forex Deposit Bonus (239)
  • Forex Live Contest (53)
  • Forex No Deposit Bonus (30)
  • Forex Rebate (Cashback) (64)
  • Forex Trading Indicators (26)
  • Forex Trading Strategies (15)
  • Forex/CFDs/Cryptos News (963)
  • Other Promotions (51)
  • Promotional Content (14)

Disclaimer

Any promotions, reviews, and other information in the website are just for the information purpose only.

There is no invitation or encouragement to invest in the Financial Market such as CFDs, Forex, Binary Options, Indices, Cryptocurrencies and so on. We disclaim liability for any loss resulting from the use of information contained on this website.

The published comments are private opinions or feedback of the users. ReviewBrokers is not responsible for any information on the website.

Recent Posts

  • TemplerFX | Grab Your $30 No Deposit Bonus Today
  • Claim Your $30 Free Account with Windsor Brokers
  • JustMarkets – Grab a Risk-Free $30 Welcome Bonus in Forex Trading
  • Boost Your Profits with OctaFX 50% Bonus Offer
  • XM Group – How to Claim $30 Forex Welcome Bonus
  • RoboForex Free Welcome Bonus: How to Claim $30 as a Forex Welcome Bonus
  • Winning Gold Trading Strategies
  • Top Forex Brokers with No Deposit Bonuses
  • FBS Global Roadshow: Nurturing Global Trading Communities Worldwide
  • What is a No Deposit Forex Bonus and How to Get It
  • Maximize Profits with Free Forex Trading Bots
  • How to Start Making Money with Forex Trading for Beginners

Risk warning

Please be aware of your investment into trading markets which is high risk and not suitable for everyone.

© 2013 - 2023 Review Brokers - Forex Brokers Review - Rebates Service - Expert Advisors Signals - Forex Promotions & News.

No Result
View All Result
  • Home
    • Binary Options Brokers
    • Forex Advertising
    • Best Brokers 2022
    • Economic Calendar
    • Contact Us
  • Expert Advisors
    • Expert Advisors Price
  • Forex Brokers
  • Education
    • Forex/CFDs/Cryptos News
    • Promotional Content
  • Forex Promotions
    • Best Promotions
    • Forex No Deposit Bonus
    • Forex Demo Contest
    • Forex Rebate (Cashback)
    • Affiliate Program
    • Forex Deposit Bonus
    • Forex Live Contest
    • Other Promotions

© 2013 - 2023 Review Brokers - Forex Brokers Review - Rebates Service - Expert Advisors Signals - Forex Promotions & News.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Warning: array_sum() expects parameter 1 to be array, null given in /home/betbonus/reviewbrokers.net/wp-content/plugins/jnews-social-share/class.jnews-social-background-process.php on line 111