This week ECB kept the rate unchanged, but President Lagarde said the bank is ‘much closer to target’ on inflation and refused to rule out tightening of monetary policy in 2022. She suggests the bond-buying could end in the third quarter.
Consumer prices in the euro area jumped an annual 5.1% in January, surpassing economist estimates by the most in at least two decades and remaining more than double the ECB’s 2% target.
BoE this week raised the interest rate 25bps to 0.5%. She will start to wind down its pandemic bond-buying program as warned that inflation will peak at 7.25% in April.
The COVID pandemic has masked the inflation and consequence of Brexit.
People have already priced in the Fed to have rate hike 3-4 times this year, BoE has right hike this year, but now ECB, so this will highly likely to catch the short position of the EURUSD. From the EURUSD, EURGBP, EURJPY, and EURAUD all show a very strong rally.
On the EURGBP weekly chart, it seems 0.8294 is the bottom, and a rally back to 60 weeks moving average of 0.8571 should seem in coming weeks. And a test of 0.909 should not be ruled out with the Fed and BoE rate hike is already priced in. Buy in EURGBP.
And UK has the issue of PM Boris Johnson’s party gate to unfold. If the PM has to step down, it will have a negative effect on GBP.
In the past, a change of the PM will plug the GBP, so let's see the situation unfold.
John Major -822
Tony Blair -966
Gordon Brown -1200
David Cameron -2253 Brexit referendum
Theresa May -599
Consumer prices in the euro area jumped an annual 5.1% in January, surpassing economist estimates by the most in at least two decades and remaining more than double the ECB’s 2% target.
BoE this week raised the interest rate 25bps to 0.5%. She will start to wind down its pandemic bond-buying program as warned that inflation will peak at 7.25% in April.
The COVID pandemic has masked the inflation and consequence of Brexit.
People have already priced in the Fed to have rate hike 3-4 times this year, BoE has right hike this year, but now ECB, so this will highly likely to catch the short position of the EURUSD. From the EURUSD, EURGBP, EURJPY, and EURAUD all show a very strong rally.
On the EURGBP weekly chart, it seems 0.8294 is the bottom, and a rally back to 60 weeks moving average of 0.8571 should seem in coming weeks. And a test of 0.909 should not be ruled out with the Fed and BoE rate hike is already priced in. Buy in EURGBP.
And UK has the issue of PM Boris Johnson’s party gate to unfold. If the PM has to step down, it will have a negative effect on GBP.
In the past, a change of the PM will plug the GBP, so let's see the situation unfold.
John Major -822
Tony Blair -966
Gordon Brown -1200
David Cameron -2253 Brexit referendum
Theresa May -599