Banda Asia: The Prime Minister's Hard Brexit Attitude is Media Speculation Part of the decline in the recovery of the pound

Bank of England Governor Carney delivered a speech titled "Policy Issues Influencing the Bank of England" at the London School of Economics early this morning. Carney pointed out that British families seem to be observing the uncertainty associated with Brexit; The changes in household consumption and borrowing in the UK over the next year are crucial for the Bank of England. Carney said that the Bank of England faces a trade-off between economic growth and inflation levels; He reiterated that the Bank of England can respond to promoting economic growth or maintaining inflation levels; The Bank of England's tolerance for inflation levels is limited. Carney stated that the impact of Brexit on the pound and the UK economy is "somewhat uncertain" in the coming years, which will affect inflation levels. Carney also stated that there are recent signs that the domestic consumption momentum in the UK is still stable, and the economic growth in the UK will be slower in the coming years; There are signs that global economic growth prospects are stronger.


In addition, economists argue that before considering slowing down their bond buying plans2017At the end of the year, the European Central Bank will remain silent. In a Bloomberg survey,3/4Respondents stated that the next major change in the European Central Bank's stimulus program will also have to wait until at the earliest2017year9Monthly announcement. Due to potential price pressures being suppressed,2/3According to the interviewed analysts, the European Central Bank will reduce the monthly purchase scale but extend the deadline to2017year12After the month. No analyst expects the European Central Bank to announce any new measures at its meeting this week. Moody's Analytic EconomistTomas HolinkaIt is said that the rising inflation in Germany may provoke opponents of quantitative easing. Nevertheless, we believe that any discussion on reducing asset purchases is immature, and we expect the European Central Bank to remain stagnant until price growth is sustainable and political uncertainty eases.

The data that needs attention today is the UK12Monthly and quarterly adjustment outputPPIAnnual rate, UK12Monthly Retail Price Index Annual Rate, UK12monthCPIAnnual rate, Eurozone1monthZEWEconomic Prosperity Index, Germany1monthZEWEconomic Prosperity Index and the United States1The New York Federal Reserve Manufacturing Index for the month. In addition, British Prime Minister Theresa May will announce a Brexit plan, which requires special attention from everyone.


USD Index

The US dollar index fluctuated upwards yesterday, with a slight daily increase and spot exchange rates trading at101.50Nearby. Yesterday was Martin Luther King Jr. Day holiday, and the US market was closed. In the light holiday market trading atmosphere, Trump's disappointing press conference had a diluted impact, and short covering was the main reason supporting the rebound of the US dollar index. However, concerns about Trump's new policies remain uncertain, limiting the room for a rebound in the exchange rate. Follow Today102.00Nearby pressure situation, supported below101.00Near.

euro/dollar

The euro fluctuated and fell yesterday, with a slight daily decline. The current exchange rate was traded at1.0600Nearby. Profit taking is the main reason for suppressing the euro's decline in the light market trading atmosphere. In addition, investors' expectations that the upcoming European Central Bank policy meeting on Thursday will not release hawkish signals have also put some pressure on the euro. However, the uncertain factors of Trump's new policy and the good performance of the Eurozone's economic data during the period have limited the downward space of the exchange rate. Follow Today1.0700Nearby pressure situation, supported below1.0500Near.

pound/dollar

The pound fell sharply yesterday and opened lower, but then rebounded slightly. The intraday decline narrowed, and the current exchange rate was traded at1.2050Nearby. Foreign media hinted in last weekend's report that British Prime Minister Theresa May will suggest in Tuesday's speech that the UK is preparing for a hard Brexit, leading to heightened concerns about a hard Brexit and a significant drop in the pound. However, under the influence of short covering and the Prime Minister's spokesperson stating that Theresa Brexit's attitude was only "media speculation", the pound regained some of its decline. Follow Today1.2150Nearby pressure situation, supported below1.1950Near.