Too much pessimism around the british pound currency
The British pound currency fell in price against the European common currency and the U.S. dollar on Thursday, and it continues to fall on Friday. The reason for that was business data publication, which showed that the British economy had already plunged into recession. Also, the local strengthening of the US dollar puts considerable pressure on the pound.
The S&P Global/CIPS UK Purchasing Managers’ Index (PMI) for December was revised lower. New business declined for the second month in a row, and the survey’s employment index fell to its lowest level since February 2021. The British pound currency paired with the euro fell 0.11% to 88.49 pence. GBP/USD was down 0.33% to 1.1867 by this time.
British pound chart — what factors form the vector of the movement?
There is too much pessimism about the UK today as the British economy is almost certainly in recession. There is a wave of strikes across the country and the crisis is hitting almost all sectors, including the rail network. Prices continue to rise, the welfare of citizens is significantly reduced, migrants are coming into the country at a record rate, the cost of living is rising steadily, while workers’ wages have not increased for more than 10 years, leaving many of them unable to make ends meet.
On top of this, the country is about to enter a period of profound political crisis, fertile ground for which Liz Truss’ short-sighted policies have prepared. It is clear that after the failures of the previous prime minister, public discontent, and skepticism toward the new government persists. In his New Year’s address, the new prime minister, Rishi Sunak, promised the annoyed British public that from now on the country’s policy would have one goal: to meet the needs of the population.
But one way or another, representatives of the Bank of England are confident that in 2023 Britain will not be able to avoid a deep economic crisis. Moreover, they expect that the recession will be even stronger than in the other G7 countries.
Earlier we reported that the news from the U.S. helped stock indices to close the week on the plus side.
Wall Street futures rise after the U.S. Fed meeting
U.S. stock index futures are rising Thursday, trading data showed. Markets are assessing the outcome of the U.S. Federal Reserve (Fed) meeting.
The Dow Jones Industrial Average (DJIA) futures rose 0.22% to 32,329 points, the NASDAQ high-tech index rose 0.96% to 12,828.5 points and the S&P 500 broad market index rose 0.48% to 3,989.75 points.
The Fed on Wednesday expectedly raised its benchmark rate by 25 basis points to 4.75-5% per year. The regulator noted that it does not expect the rate reduction this year, but allows it next year. U.S. exchanges were down 1.6% in Wednesday trading.
According to the CME Group, 55.8% of analysts now expect the Fed’s discount rate to remain unchanged in May, while 44.2% expect it to rise another 25 basis points. Thus, markets concede that the Fed may interrupt the cycle of hikes that began last March.
At the same time, shares of cryptocurrency exchange Coinbase were down 10.6% in pre-bid trading. The exchange this week received notice from U.S. authorities of an impending charge of violating laws.
Later in the trading, statistics on initial jobless claims in the U.S. for the week through March 18 will be released. Analysts forecast that the figure would increase by 5 thousand to 197 thousand applications.
Earlier we reported that the US budget deficit was $262bn in February.
ITB (International Trading Brachium) Broker Announced Its YouTube channel
(Mahe, Seychelles-March 08, 2023) – ITB BROKER, LLC, an international forex broker, has announced that with our community growing, we believe that this will be the most effective medium to communicate with and so, we’re proud to announce the launch of ITB YouTube channel .
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- Over the next few weeks, we will be launching interesting videos on upcoming ITB features, bonuses, partnership or IB announcements and financial market expert interviews.
- YouTube is a great place to pick up forex trading tips and learn how to use them in the real world.
There are a number of YouTubers that make great educational videos, perfect for beginners or those considering taking up forex trading. ITB group with over 10 years of financial experience provides you with useful tips and hints of forex trading via its YouTube channel.
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U.S. budget deficit totaled $262 billion in February
According to a report from the U.S. Treasury Department, the U.S. budget deficit in February was $262,434 billion compared to a $38.8 billion deficit in January. The Dow 30 also had problems.
Analysts at DailyFX suggested that the nation’s budget deficit for February was expected to be $256 billion. A year earlier, in February, the U.S. posted a budget deficit of $216,590 billion.
According to the GAO report, U.S. government spending rose 3.5 percent year over year last month to $524.548 billion, while revenue, in contrast, declined 9.5 percent to $262,114 billion.
Earlier, the U.S. edition of the Washington Post published an editorial stating that the new draft budget proposed by the Biden administration undermines U.S. national security and its ability to invest in the future, because it suggests a further growth of the U.S. national debt.
The WP editorial board noted that the new draft budget assumes a $2 trillion budget deficit, including due to the high cost of providing health insurance to the elderly of the baby boomer generation.
Earlier we reported that the EU has agreed to reduce energy consumption by 11.7% by 2030.
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