EUR/USD Is Rising Again

Although many people, including analysts from the Wold Bank, suspected that Fed would raise the US interest rates, that didn’t actually happen. Fed keeping the interest rates the same as they have been since 2008 gave EUR/USD the necessary push to begin rising again. I think the pair has headed for the resistance at 1.1540. It is also very likely to continue moving to the upside until it reaches the previous high at 1.1713 if it manages to break above that resistance. Either way, the EUR/USD correction continues for now.

US Central Bank Kept the Interest Rate Unchanged

The US Central Bank made the decision to hold the interest rate the same as they have been since the beginning of 2008.

 The Federal Reserve said nine members of its Federal Open Market Committee voted to hold the key federal funds rate target at 0 to 0.25%.
Committee member Jeffrey Lacker was the only dissenter, favouring a 0.25 percentage point rise.
The Fed hinted that concerns about the strength of the global economy influenced the decision.
"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the committee said in a statement.
Signs of weaker growth in China have led to fear among investors about US economic growth.

The World Bank Is Concerned About US Rate Rise

The World Bank has warned developing countries to brace themselves for trouble if or when the US Federal Reserve begins raising interest rates.

This could happen as early as tomorrow when Fed concludes its policy meeting.

While a new report from the World Bank says the impact will likely be modest, it still warns that there could be more serious consequences.

The Bank says it is possible that there would be sufficient disruption to capital flows into developing countries to harm economic growth and financial stability.

US interest rates have been practically zero for more than six years and as the economy continues to recover, the Fed is sure to raise interest rates at some stage.
Developing countries are bound to be affected when it happens and the first step might be imminent.
The new World Bank report gives a number of reasons why developing nations should be able to cope without a great deal of fallout. Notably, the rate rise has been anticipated for a long time and it is likely to be a gradual process.
That said, there are risks of what the report calls a "perfect storm".
Some developing countries are vulnerable. The report doesn't point the the finger, but Turkey, Brazil and Venezuela are almost certainly among them.
The risks for countries include government and private sector debt, especially if it is in a foreign currency, and a large deficit in international trade, which has to be financed by borrowing from abroad. Weaker economic growth is also a factor, and Brazil has seen a marked deterioration.
There is a risk of a large decline in funds going to developing nations and if international investors were to become more wary of riskier investments it could have an impact even on countries that don't have specific weaknesses.
The conclusion: the developing world should be "hoping for the best butpreparing for the worst".

GBP/USD Is Moving To The Downside Again

GBP/USD reached the resistance at 1.5440 visible on the daily filter chart, formed a doji candlestick right under the resistance level and began moving to the downside again. I expect that the pair will continue falling for the time being and will not stop until it reaches the previous low at 1.5160 which also coincides with the support level visible on the weekly filter chart. The pair bounced off that support once already, but should it manage to break below it this time around we can probably expect a further considerable move to the downside.

EUR/USD Finally Broke Above The Resistance

After several days of consolidation EUR/USD finally broke above the resistance at 1.1240, which should not have been too big of a surprise considering the inverted hammer above the support at 1.1100 visible on the weekly filter chart. The pair will likely continue climbing at least until it reaches the resistance at 1.1440, also visible on the weekly filter chart. Should it manage to break above that level, however, I expect it to continue moving to the upside until it reaches the previous high at 1.1713.

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July Was A Weak Month For UK Manufacturing

According to official data July was a weak month for UK manufacturing.

Manufacturing output decreased with 0.5% compared with the same month last year, said the Office for National Statistics (ONS).

The overall index of production (IoP) that includes mining and quarrying and utilities increased with 0.8% for the same period.

The IoP accounts for about 15% of the UK economy.
It means that production is still 9.3% below its pre-downturn peak, achieved in the first quarter of 2008, while manufacturing is 5.2% below its peak.
If the British economy was driven by manufacturing, we could well be in seriously dire economic straits, figures released today show.
The main drags on the manufacturing figures were basic metals and metal products, transport equipment and "other manufacturing and repair".
Trade in goods increased the deficit in the latest trade figures, which were also released on Wednesday.
The trade deficit shows how much more the country is importing than it is exporting.
The overall deficit in the trade in goods and services was estimated to be £3.4bn in July, up £2.6bn from June.
That widening was attributed to trade in goods, in which the deficit was£11.1bn, compared with £8.5bn in June.

Gold Is Falling Again

After several days of consolidation GOLD moved to the downside again, reached the support at 1105.70 and it looks like it is currently breaking below that level. Time will tell whether this break will be confirmed, but in case that does happen I think we can expect it to continue on its way down towards the previous low, which is at 1077.17. If you take a look at the weekly filter chart however you will notice that there is plenty of opportunity to continue falling should it manage to break below that support too. Frankly, I wouldn’t be surprised if it finally reaches 1000.

Saudi Arabia Will Cut Spending Because Of The Oil Price Drop

According to Finance Minister Ibrahim al-Assaf  Saudi Arabia will cut spending and delay some state projects because of the the recent drop in the price of oil.

He also said the country was in a good position to manage low oil prices.
Saudi Arabia, the world's largest oil exporting country, has maintained its production levels despite a collapse in the price of oil.
Oil is trading at less than $50 per barrel, half the price of a year ago.
"We have built reserves, cut public debt to near-zero levels and we are now working on cutting unnecessary expenses while focusing on main development projects and on building human resources in the kingdom," he said in the interview.
Some areas of the economy will still receive investment, he said, as the country tries to improve industries outside energy.
"Projects in sectors such as education, health and infrastructure are not only important for the private sector but also for the long-term growth of the Saudi economy," he said. He did not give details of where cuts would happen.
It may issue bonds, or Islamic bonds known as sukuk to finance some spending, he said.
The kingdom has more than $600bn in reserves it can draw upon shouldexpenditure outstrip income from oil exports.

EUR/USD Bounced Off The Support

The fundamentals this week may have pushed GBP/USD to continue on its way down, but so far they failed to have as strong of an effect on EUR/USD. The pair did briefly drop again below the support at 1.1107 coinciding with (89)MA on the daily filter chart, but that proved to be a false breakout. Should the pair manage to break below that level next week we can expect a further move to the downside until it reaches the support at 1.0950. In my opinion, however, EUR/USD is more likely to climb again towards the resistance at 1.1233, and should it break above that level – perhaps even higher.

GBP/USD Continues Its Descent

As I expected earlier this week, GBP/USD continued its descent after it broke below the support at 1.5330. Although I always feel apprehensive before the announcement of big fundamentals, this week’s ECB rate announcement and US Non-farm payrolls only gave the pair the necessary push to continue towards the next support at 1.5100 visible on the weekly filter chart. If it breaks below that level we might see GBP/USD fall much lower than that and head for the previous low at 1.4560.

Paper Banknotes Are Disappearing Quickly

No, banknotes themselves in the UK aren’t disappearing, it’s just that they won’t be made out of paper any more. In a few years the only paper banknote available will likely be the £50 note.

The Bank of England has announced that the next design of the £20 note will be plastic.
The new £20 note, entering circulation in 2020, will follow the polymer £5 and £10 notes.
Consumers will be able to get their hands on the new plastic £5 note, the first in the polymer series, from 2016.
This will feature the image of Sir Winston Churchill.
The Bank argues that the polymer notes stay cleaner and are more secure than cotton paper notes, which have been used for more than 100 years.
The £5 polymer note will enter circulation in the autumn of 2016, followed by the Jane Austen plastic £10 note a year later.
The Bank said that the decision for the £20 note to also be made from polymer came after "extensive research into the developments in security features".
On a more practical level for many consumers, it will also survive a spin in the washing machine.
A bank committee is considering which character will appear on the new £20 note. It received 29,701 nominations from the public after it announced it wanted to celebrate an artist on the note. Some 592 eligible visual artists are being considered for the honour.
The final decision will be made by the Bank's governor, Mark Carney.Favourites include the sculptor and artist Barbara Hepworth, the author BeatrixPotter and fashion designer Alexander McQueen.

GBP/USD Broke Below The Support

GBP/USD reached the previous low at 1.5330 and eventually broke below that level. It is very likely that the pair will continue falling at least until it reaches the next support at 1.5130 visible on the weekly filter chart. Still, we should not forget that the ECB rate decision will come out this Thursday , and on Friday we can expect the US Non-farm Payrolls. Both events always provoke great volatility on the market and I, for one, am very cautious when trading in the days before them.