Why are speculators focused on the EUR and GBP?

 

Today, two currencies, the EUR and the GBP, will be the main focus of market participants.

Rumours about the failure of negotiations on BREXIT are starting to negatively affect the prices of the British currency. However, on the part of statistics from the UK, there does seem to be some support for the GBP.

The consumer price index of Great Britain will be published at 08-30 GMT. This is one of the key indicators on which the Bank of England focuses when making its decisions on the regulation of monetary policy.

According to the forecast of most analysts, a value is expected that should strengthen the faith of market participants that at its next meeting, the Bank of England will raise the key interest rate, and as a result, the market expects the strengthening of the British currency.

Chart: tradingeconomics.com

After the release of these statistics, the Governor of the Bank of England, Mark Carney, will deliver a speech. Most likely, the market participants will not hear significant statements that will drastically change the dynamics of the British currency at this time. Most likely, Mark Carney will repeat his previous thesis, which will allow the British currency to strengthen slightly against the US dollar.

The inflation rate for the euro area will be released at 09-00 GMT. Additionally, favorable figures are expected for this statistic, which will allow the ECB to begin the normalization of its monetary policy as soon as possible.

Chart: tradingeconomics.com

The index of economic sentiment from the ZEW Institute will allow market participants to look a little into the future. This indicator is considered a 'leading' indicator. Its calculation is based on the survey indicators among analysts and investors, which allows us to know the moods and expectations of the direct market participants. Positive values are expected, which should at least allow the European currency to become slightly stronger.

Chart: tradingeconomics.com

In the review of October 10, the reasons that should contribute to the growth of oil prices in the future were analyzed. Now ,the situation has become more tense due to the clashes between Kurds and Iraqi troops. The price of oil in such conditions may reach the targets set out in the chart at a much quicker pace. The region of the Middle East over the past decades has accumulated a large tangle of problems, and the clashes between Iraqi troops and Kurds can have very serious consequences, which will certainly affect the prices for 'black gold'.

 


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