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Why did the GBP sink so low after the EU referendum? – Ahead Of The Week 11th July 2016
Made for event traders to prepare their trading calendar, coming up in Banc De Binary’s Ahead of the Week Report for July 11-15, 2016.
The asset focus this week is on the GBP because of the market chaos triggered by the UK’s strong desire to leave the European Union. The Bank of England’s interest rate decision and asset purchase release is on Thursday. As the heat gets turned up for the central bank doves, there is the distinct smell of burning feathers, so it’s a week of strong pressure for the GBP.
On Monday July 11th, the GBP is in the spotlight with the BRC Retail Sales Monitor for June released at 23:01. Last seen at the level of 0.5 percent on a yearly basis, as always, Retail Sales numbers are a clear benchmark for consumer spending and confidence in the economy.
Tuesday July 12th brings even more trading opportunities on the GBP, which may be set for another price movement during the release of the Inflation Report Hearings at 09:00. The Treasury’s policies are put under a microscope by the House of Commons, the Bank of England and the Financial Conduct Authority during this event. Depending on the signals there could be some more reactions ahead for the already-volatile GBP.
Moving away from the GBP for one day, the Loonie is in focus on Wednesday the 13th, with the release of the Bank of Canada’s Interest Rate Decision at 14:00. The global economic outlook has darkened since the Brexit vote, and central banks are looking at their books, planning how they can ease their way out of this latest market crisis. Could Bank of Canada blink first here and reduce its interest rate from the current level of 0.5 percent? We’ll see on the day.
Thursday the 14th is our trading event of the week. The Bank of England will show its cards at 11:00 when it announces its Interest Rate Decision, Meeting Minutes and Asset Purchase budget. Currently the rate is 0.5 percent and the central bank is buying up 375 billion Pounds worth of assets like bonds to invest in the economy and keep returns stable. The Brexit has turned bond yields negative, so the central bank is facing a real problem of investor confidence.
The trading week wraps up on Friday the 15th with US Retail Sales. The release is at 12:30 and provides an insight into the health of the US retail sector. Last seen at the level of 0.5 percent on a monthly basis, any upside or downside surprises to the new results could impact the USD.

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