Forex Recap

Forex Recap: London Session March 16th, 2017

GBP

The British pound traded mostly sideways during the London session on Thursday. Queen Elizabeth granted her Royal Assent to the Brexit Bill, giving Theresa May legal authority needed to continue with Brexit preparation. May is now officially authorized to trigger Article 50 of the TEU, starting the formal process for an actual Brexit. The Royal Assent was widely expected and didn’t have much impact on the British pound.

The BOE’s Monetary Policy Committee decided to maintain the current monetary policy. With an 8-1 vote, the Bank Rate is left at 0.25%. Some members of the MPC agreed that “with inflation rising sharply, and only mixed evidence on slowing activity domestically, it would take relatively little further upside news on the prospects for activity or inflation to consider that a more immediate reduction in policy support might be warranted.” This triggered a slightly bullish view on the GBP, which was up by 75 pips against the U.S. dollar.

The MPC further decided to leave the government bonds purchases at £435B, and to continue corporate bond purchases up to a total of £10B.

USD

The US stock market ended the day near unchanged levels, with S&P down -0.16% and DOW down -0.08%. The FED signaled a gradual approach for rate tightening, and announced the possibility of only two more rate hikes this year, according to ABN AMRO Research.

ABN AMRO projects that the general USD weakness is likely to continue over the coming days. “It is likely that the US dollar rally has come to an end and that more downward pressure is building in the near-term,” ABN AMRO adds.

CHF

The Swiss National Bank (SNB) announced as expected that it will keep its current monetary policy. In its Monetary policy assessment of 16 March, the SNB stated that it “is maintaining its expansionary monetary policy. Interest on sight deposits at the SNB is to remain at –0.75% and the target range for the three-month Libor is unchanged at between –1.25% and –0.25%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. The SNB’s expansionary monetary policy is aimed at stabilizing price developments and supporting economic activity. The Swiss franc is still significantly overvalued.”

Summary
Forex Recap: London Session March 16th, 2017
Article Name
Forex Recap: London Session March 16th, 2017
Description
Recap of the London Session and where specific currency pairs are heading for Forex traders.
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Forex Tips