Michael_Stark_Exness

Michael_Stark_Exness

Considering monetary policy alone, it seems questionable whether euro-pound’s recent strong gains are sustainable since the current difference in rates of 1.75% in favour of the pound probably won’t shrink more than 0.2 or 0.3% this year. That said, sentiment on the pound has deteriorated markedly in recent weeks as the British government’s borrowing has...

Michael_Stark_Exness

Monday’s bounce as the USA took a day off for the inauguration was quite vigorous but doesn’t seem to alter the overall technical picture significantly. With the BoE expected to cut about 0.15% more than the Fed this year in total and ongoing concerns about the British government’s budget and the country’s growth, the fundamental situation seems to favour more...

Michael_Stark_Exness

Much stronger GDP and exports from China gave some support to the offshore yuan in the last few days but not enough to realise a notable recovery. There remains some concern over the job market in China while traders are also widely anticipating negativity from new American tariffs in the next few months. USDCNH hasn’t made a clear new high in 2025 and remains...

Michael_Stark_Exness

Gold pushed above $2,700 even in the aftermath of higher American inflation as traders widely expect inflation to accelerate further after new tariffs are introduced and sentiment remains very strong overall. Weaker than expected retail sales in the USA also gave some support to the metal. There were two unsuccessful tests of the area around $2,720 in late...

Michael_Stark_Exness

Most of the time, one would expect rising yields from bonds to boost a currency: British 30-year gilts currently yield nearly 5.5% – a high of more than 25 years. That the pound has continued to decline despite this suggests flight of capital from the UK. High government borrowing and general fiscal instability in the UK are causing concern among many traders....

Michael_Stark_Exness

Gold was among the best performing major instruments in the week ending 10 January, on track to deliver its strongest weekly gains in about two months. New tariffs set by the incoming Republican government of the USA and rising inflation are both key factors in focus. If the price manages to break above the psychological area of $2,700, the next main resistance...

Michael_Stark_Exness

As with euro-dollar, the main fundamental factor recently for dollar-yen has been monetary policy. The Bank of Japan’s recent moderate hawkishness seems more questionable now with real annual wages having fallen recently while the Fed seems to be confirmed to cut only twice this year. The break above ¥158 in the last few days hasn’t led to a clear breakout but a...

Michael_Stark_Exness

Euro-dollar’s long downtrend has paused for breath in January so far as participants digest possibilities for central banks this year. Two cuts by the Fed seem to be more-or-less confirmed for now but there’s still some intrigue as to how low the European Central Bank (‘the ECB’) might go in 2025. Recent expectations suggest three cuts with a chance of about 70%...

Michael_Stark_Exness

Like gold, bitcoin retraced lower around the Fed’s latest meeting, which is a normal reaction as the outlook for monetary policy becomes less dovish. Bitcoin is arguably a bit less vulnerable than gold to higher rates because there are various ways for holders of transferable bitcoins, especially now that many coins are at or close to all-time highs. Participants...

Michael_Stark_Exness

Gold’s reaction to the news of only two likely cuts next year was pretty typical. Demand is likely to be at least somewhat lower than in the first three quarters of 2024 now that rates will probably remain higher for longer. However, demand for havens is unlikely to decrease significantly in the near future amid turbulence in Syria and Donald Trump’s upcoming...

Michael_Stark_Exness

British data on Friday 13 December were pretty roundly disappointing: monthly GDP for October, industry and manufacturing all contracted against expectations for growth. Current estimates suggest that the Bank of England (‘the BoE’) will hold rates on 19 December and cut only three times in 2025, so it’s moderately likely that the BoE will remain at least one step...

Michael_Stark_Exness

Traders have mostly discounted the latest single cut by the European Central Bank (‘the ECB’) since that was widely expected and the comments in the subsequent press conference didn’t give any significant new information. Inflation has also risen in the eurozone in the last two months but hasn’t reached as high as in the USA. The difference in rates between the...

Michael_Stark_Exness

¥155 remains the key support for EURJPY on the daily chart; however, the latest downward movement has paused before reaching that area. Participants have mostly discounted recent political instability in France since the government’s collapse had been widely expected. Meanwhile in monetary policy the European Central Bank is likely to cut the deposit facility rate...

Michael_Stark_Exness

GBPJPY moved up after the latest test of ¥188 as it now appears unlikely that the Bank of England will cut rates this month although the Bank of Japan still seems to be on track to tighten policy in the near future. In a recent interview Andrew Bailey indicated that four cuts are likely next year; the difference in rates for pound-yen is unlikely to go below 3%...

Michael_Stark_Exness

Like most major altcoins, Ether has followed bitcoin’s recent gains amid strongly positive sentiment and new inflows of capital. Unlike bitcoin, though, Ether still hasn’t made a new all-time high during this bull run. The price is still about 20% below November 2021’s high around $4,850. Although $4,000 is the clear immediate target and it seems likely that the...

Michael_Stark_Exness

Bitcoin surged past $100,000 on 5 December in a large intraday movement as sentiment continued to be positive. Participants expect a significantly more crypto-friendly environment when the new American government takes charge in January. Based on performance within the last month, it’s unlikely that $100,000 will now become a strict level of support, rather an...

Michael_Stark_Exness

The fundamental situation for NZDJPY is essentially different from most other pairs with the Kiwi dollar since the Bank of Japan is in a cycle of slow tightening rather than the RBNZ’s relatively aggressive loosening. The probability of a hike by the BoJ on 19 December is now about 60%. Possible new American tariffs on imports would affect both countries, but New...

Michael_Stark_Exness

Recent American data generally in line with expectations supported the impression that the Fed will continue to cut gradually, while the RBNZ’s double rather than triple cut on Wednesday also gave some support recently to NZDUSD. The selection of Scott Bessent as incoming American Treasury Secretary has somewhat decreased the likelihood of immediate large...