The British pound down on Thursday ahead of Bank of England monetary policy decision later today. The market participants expect the central bank will announce an increase in its asset purchase program by at least GBP 100 billion.
Asian markets slipped on Thursday, Japan’s Nikkei 225 index fell 1.1%, Australia’s S&P ASX 200 index was down 0.82% and Hong Kong’s HSI benchmark was off 0.33%. Australian shares dropped after the country announced its highest jobless rate since October 2001. Overnight in Wall Street, The Dow Jones Industrial Average lost 0.6%, the S&P 500 dropped 0.4%, while the Nasdaq closed 0.1% higher.
Crude oil prices slipped on Thursday after the EIA reported that the US commercial crude oil inventories have increased by 1.2 million barrels from the previous week. The global oil market is slowly starting to rebalance thanks to production cuts and relaxing coronavirus lockdowns, but the industry is still swimming in excess supply, the OPEC said Wednesday.
The Australian dollar and New Zealand dollar have underperformed during the Asian session after disappointing Australian Employment numbers (Australia’s jobless rate hits 7.1% - the highest level in nearly 20 years) and New Zealand's GDP fell 1.6% in the last quarter, the largest drop in 29 years.
Gold prices recovered from the early loss supported by rising worries of a second coronavirus wave and expectations that the U.S. Federal Reserve would maintain low-interest rates in the near term.
On Wednesday, the US Federal Reserve Chair Powell said the economy was in the early stages of recovery and that policy needed to remain accommodative. The recent economic improvement could be jeopardized if Congress curtailed support to workers displaced and businesses shuttered by the coronavirus pandemic, he added.
During the Asian session today, the People’s Bank of China (PBOC) cut its reverse repo rate from 2.55% to 2.35% in an attempt to boost the economy.
Moving ahead today, the important events to watch:
UK Bank of England interest rate decision and policy statement – 11.00 GMT
US weekly jobless claims– 12.30 GMT
US Philly Fed manufacturing index- 12.30 GMT
The number of people infected with COVID-19 around the world rose above 8.06 million, of which more than 440 thousand have died. The biggest number of coronavirus cases was reported from the United States (2,098,106), Brazil (888,271), Russia (553,301), and India (354,065). Meanwhile, China on Thursday reported 28 new coronavirus cases, including 24 in Beijing, taking the total number of infections in the last few days to 161.
GOLD: Gold price edged higher above $1730 on Thursday during the European session as virus fears are growing.
The important levels to watch for today: Support- $1718 and $1708 Resistance- $1744 and $1760.
GBP/USD: The pair dropped to a session low of 1.25 ahead of BOE monetary policy decision later in the day.
The important levels to watch for today: Support- 1.2500 and 1.2450 Resistance- 1.2610 and 1.2690.
Quote of the day: the highest profits are made in trades that show a profit right from the start- Jesse Livermore.
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