questions that the UK needs to answer by the EU Summit on April 10. Until then, the legal default remains for the UK to exit the EU without a deal, which in turn, keeps open the risk for the Pound to fall," says Philip Wee, a foreign exchange strategist with DBS Bank in Singapore.
Some say all of this Drama surrounding Brexit has already taken its toll on the British economy and no matter what the outcome, the British economy has suffered major damage which will be felt for years to come.
So even if will do see a positive outcome in Brexit negotiations this week and a deal is reached for the UK to have a smooth and orderly exit from the EU, the damage may already be done and the chances of any major rally for the pound may be difficult.
18:05The gold price has remained above the $1300 mark in today’s trading session after breaking this important level yesterday and today’s outcome regarding Brexit negotiations may dictate whether the precious metal can remain at or above this price.
Gold has failed to make any significant gains over the last few weeks as investors await the outcome of Brexit negotiations and that may finally come to a head today at the EU summit that will take place early this evening.
During the Summit, the UK will ask for a further extension regarding Brexit in order to buy time to forge a deal among waring MP’s and depending on the decision of the EU which requires all 27 states to agree, the pound is likely to see extreme volatility.
"Now, we are in calm waters. We have only seen people standing on the sidelines. It is like a tranquil swimming pool and this will remain until we know what is happening with Brexit,” Said Goldex CEO and founder Sylvia Carrasco.
“Up until Brexit is settled, the economy will continue to be in uncharted territory .We have investors who are waiting to open gold accounts until they know what is happening with Brexit. This is investors who are keen on gold, but are waiting on the sidelines,” she said. “Uncertainty is what is happening in gold at the moment.” She added.
Also helping the gold price is speculation that the US Federal Reserve may be preparing the market for a rate cut later in the year which is a complete about turn from a few months ago where many analysts were sure that more rate hikes were on the way.
These rumors have put pressure on the US dollar and a weaker greenback is always good news for gold.
The Chinese government has also reportedly been stockpiling a significant amount of gold which provided added support.
“There’s a little bit of easing risk appetite, the U.S. dollar is weak and we saw Chinese central bank’s acquisition of gold for a fourth month. A combination of all these factors have moved gold into the $1,300s,” said Bart Melek, head of commodity strategies at TD Securities in Toronto.
45m 16s19:36cambridge_igcse_first_language_english_coursebook_fourth_edi.pdf16:44glencoe_language_arts_vocabulary_power_grade_10 (1).pdf10:03After nearly falling down through the US68c mark a little over 2 weeks ago, the Australian dollar has recovered strongly and is now sitting firmly above the US70c mark and with mixed data hitting the market, analysts are divided on the future direction of the currency.
In a sign that the housing market in Australia may be turning around, Approvals for new home construction projects rose by 0.7% which was well above analysts expectations for a 0 percent rise and may be attributed to the recent rate cut from the reserve bank of Australia which has allowed developers to borrow money at lower rates.
"The signs of green shoots are encouraging, with unit approvals creeping up for the last few months," says Felicity Emmett at Australia & New Zealand Banking Group
"The historically low cash rate, along with potential easing in finance regulation by the Australian Prudential Regulation Authority could help support approvals in the coming months." she added.
Some however believe that a reviving property market will not be enough to support the Australian dollar and a reversal is on the cards as the RBA will need to cut rates further in order to boost inflation which for years has been below the RBA target rate of between 2 and 3 percent.
The waning jobs market is another reason the RBA will need to reduce rates further.
"We struggle to see how these forecasts can conclude anything other than further stimulus is needed to achieve the target the RBA has set itself, namely, an unemployment rate of 4.5%. The two rate cuts built into the May forecasts was not expected to get the economy to this point and we don’t see anything since then that will prompt the RBA to revise the growth outlook higher. says David Plank, head of Australian economics at ANZ
“Our base case remains that the RBA will ease again in August," he added.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group Holdings Limited, a company registered in Cyprus and regulated by CySEC. Please familiarize yourself with the Terms of Business through the link. Click "Cancel" to remain on this page.|