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The battle of life and death at the pound 1.36 mark! US-Russia summit and UK CPI data may determine long and short world
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Hello everyone, today XM Foreign Exchange will bring you "【XM official website】: Life and death battle at the 1.36 pound mark! The US-Russian summit and the UK CPI data may determine the long and short world". Hope it will be helpful to you! The original content is as follows:
The pound rebounded slightly against the US dollar on Friday (August 15), partially recovering its decline on Thursday. Earlier, the U.S. producer price index (PPI) in July showed that wholesale prices rose the largest in three years, driving the dollar to rebound strongly.
The dollar index (DXY), which tracks the dollar against six major currencies, fell slightly to around 97.85, but still basically held the rebound results of Thursday from a two-week low of around 97.60.
Data shows that the overall PPI and core PPI (excluding food and energy prices with high fluctuations) both rose 0.9% month-on-month, while the data in June remained unchanged. Hot PPI data show that American www.xmtraders.companies are unwilling to digest the impact of tariffs on their own and are passing costs on to consumers.
The rising inflation has caused market experts to doubt the Fed's expectations for a rate cut in September. Analysts at high-frequency economic www.xmtraders.companies pointed out: "This report strongly confirms the Fed's wait-and-see position on policy adjustments."
Despite high inflation data, CME Fed observation tool shows that traders still expect a higher probability of interest rate cuts in September. The July CPI report released on Tuesday showed that the labor market cooled and the lack of evidence that the tariff effect was transmitted to consumer prices, strengthening market expectations for interest rate cuts.
Market analysts believe that the consumer price increase is relatively mild as importers hoard inventory before levying tariffs to buffer the impact of price increases. But according to CBS, Oxford Economic Research analysts warned: "As inventory exhausted and www.xmtraders.companies face profit margin pressure to adjust pricing, the data may show more www.xmtraders.comprehensive signs of tariff-driven inflation in the future."p>
The trading of pound sterling is stable, and the focus turns to the UK CPI data
The pound sterling exchange rate remains narrow during the day, and market trading is light, and investors are waiting for a clear signal of the Bank of England's monetary policy direction in the second half of the year. Currently, the financial market generally expects that the Bank of England will keep the current interest rate unchanged given the continued high inflation pressure in the UK. The better-than-expected GDP data for the second quarter also provides policy makers with breathing space.
The United Kingdom's Office for National Statistics (ONS) data released on Thursday showed that the economy grew by 0.3% month-on-month in the second quarter, better than expected by 0.1%, but slowed significantly from 0.7% in the first quarter. Economists warn that global trade risks, weak labor demand and the possibility of tax increases in the fall budget by Chancellor Rachel Reeves will be the main factors that drag on Britain's economic growth in the near term. Quoting the view of economists at RSM UK accounting firm, RSM said: "In view of the ongoing sluggish consumer confidence, weak global demand and tax increase expectations, we expect economic growth to be difficult to accelerate significantly." As the impact of increased welfare spending announced in early July on fiscal targets is needed to offset the impact of increased welfare spending announced in early July, the probability of tax increases is higher.
The market focus in the future will turn to the UK July CPI data released on Wednesday. During the day, investors are more concerned about the US retail sales data released in July at 20:30 Beijing time. The market expects the month-on-month growth rate to slow to 0.5% (the previous value is 0.6%).
At the global level, financial market participants are closely watching the U.S.-Russia Leaders Summit held in Alaska on Friday. US President Trump met with Russian leader Putin this time to discuss ending the Russian-Ukrainian conflict. According to Reuters, Trump expressed his belief on Thursday that Putin is ready to end the conflict, but that peace may require at least a second round of talks, including Ukrainian leaders.
Technical analysis: The short-term trend of the pound remains bullish
The pound is currently trading around 1.3550 against the US dollar, down from the two-month high of 1.3600 hit on Thursday. From a technical perspective, the pair's short-term trend remains bullish as it sticks above the 20-day index moving average (EMA) 1.3448.
The 14th-day Relative Strength Index (RSI) is trying to break through the 60 mark. If it successfully breaks this level, new bullish momentum will be confirmed.
Key support levels focus on August 11 low of 1.3400, while upward resistance looks near July 1 high of 1.3790.
The above content is all about "[XM official website]: Life and death battle at the 1.36 pound mark! The US-Russian summit and the British CPI data may determine long and short world". It was carefully www.xmtraders.compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your transactions! Thanks for the support!
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