Annual UK Retail Sales growth, when released on Thursday, dipped to 0.6% annually which was a big miss from the 1.9% the market expected. The UK retail sales number was overshadowed however by the Bank of England’s minutes that showed more committee members are now calling for Rate increases. The BOE is unique in that when it releases its interest rate decision and policy statement it also issues the minutes from the meeting. Most other Central Banks release the minutes some days and weeks later. What the minutes showed was that three Bank of England committee members would like to see the Central Bank begin to move away from its current low 0.25% interest rate policy and raise rates. This caused the Pound to rally sharply and once again backs up my calls that the Pound will likely rally in the coming 12 months as interest rates in the UK are surely set to rise in 2018. The market will not wait for the BOE to raise the official cash rate, it will buy it in anticipation just like it will likely buy the Canadian Dollar. Both currencies are likely to gain continued momentum higher in the coming 12 months against any currencies that have Central Banks that are sitting on their hands keeping rates low.
The Yen was abandoned Thursday with traders buying back into the US Dollar and Pound following recent economic and political uncertainty in both countries. The US Fed elected to raise the official interest rate Wednesday and Thursday’s US Weekly Jobless Claims report and a business confidence survey backed up the Fed’s view the economy can withstand higher interest rates.
On the economic calendar today the Bank of Japan Governor will speak at 4.30pm AEST and you should expect increased volatility on the Yen at this time. In the European trading session, its Euro Zone Inflation figures and in the US trading session the market will get May US housing starts and building permit figures and a University of Michigan confidence survey which is essentially a consumer confidence report about how US consumers are viewing their personal finances.
The CAD v JPY Order Sheet Wave trade I spoke about yesterday triggered the long entry provided by the Order Sheets. The entry was above the 200 EMA and technically we are heading higher into Wave 5. Today all that is required is to adjust the trailing stop loss which the Order Sheets will provide you each day for any orders filled. Please refer later this afternoon to my Friday video update for further information about the Order Sheet Wave Trades that will be sent via Trade Time from the 1st July.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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