The “sluggish” forecast from the IMF likely means that central banks will keep interest rates at or near historically low levels. Furthermore, it opens the door to more creative central bank stimulus like Quantitative Easing (QE) and fresh fiscal stimulus. This could provide support for gold throughout the year.
Strong employment numbers weaken the case for an interest-rate cut when the U.K. central bank’s rate-setting committee meets next week on the eve of Brexit
IMF attributes ‘the lion’s share’ of downward revision to ‘more subdued growth forecast’ for India. Asia’s third-largest economy, is expected to grow by 5.8% in 2020, a 1.2 percentage point markdown from the organization’s October forecast.
Job numbers out of the UK were generally positive on Tuesday, triggering a rally in the pound to dollar exchange rate.
In a quarterly review of its forecasts, the BOJ revised up its growth projection for the fiscal year beginning in April to 0.9% from an estimate of 0.7% growth made in October, helped by a boost from the government’s fiscal stimulus package.
U.K. employment grew by 208,000 in the three months to November as the unemployment rate stayed at 3.8%, the Office for National Statistics reported Tuesday. Average weekly earnings stayed at 3.2%, and the claimant count for December edged up to 3.5% from 3.4%. The British pound rose after the publication of the data, with sterling rising to $1.3028 versus Monday's close of $1.3009.
Equity markets moved into risk-off mode overnight with E-mini S&P; futures down 40bp, and Europe is expected to open the same. Asian weakness was led primarily by the spread of the coronavirus in China, which comes on top of a downgrade of global growth forecasts from the International Monetary Fund, and Moody’s cut the credit rating of Hong Kong.
EUR/USD is showing strong bearish price action after breaking below the support trend lines. Price action looks ready for a decisive breakout below 1.1090.
Based on the early price action and the current price at .6849, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term 50% level at .6851.
President Donald Trump is due to deliver a speech to the World Economic Forum in Davos. While in Switzerland, Trump will be meeting with foreign counterparts including European Commission President Ursula von der Leyen, as attention turns to trade relations with Europe after the U.
Based on the early price action and the current price at .6597, the direction of the NZD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to .6625.
The pound is subdued on Tuesday, but that could change later in the day, as investors brace for soft employment numbers out of the U.K. (releases at 9:30 GMT).
Based on the early price action and the current price at 108.929, the direction of the USD/JPY the rest of the session on Tuesday is likely to be determined by trader reaction to the minor pivot at 110.040.
More stats due out of the UK could test the Pound further this afternoon. Earlier in the day, the BoJ held rates steady.
Investing.com - The Japanese yen is in demand Tuesday as a safe haven currency with the outbreak of the pneumonia-like virus in China sparking a bout of risk aversion.
It’s a mixed start to the day. Steering clear of key levels through the morning would support a breakout later in the day.