FX.co ★ Pound took the first step

EUR/USD, GBP/USD

The result of yesterday's vote by the Bank of England's monetary policy committee on interest rate turned out to be expected - two people voted for the rate hike, but since there were three of them last year (former member Forbes who was a "hawk" has left the Bank of England), the pound immediately fell by 120 points. The Central Bank's forecast for the economy turned out to be weak - according to GDP for the current year, the forecast was lowered from 1.9% to 1.7%, for the next year from 1.7% to 1.6%. Furthermore, the increase in the forecast for inflation for next year from 2.4% to 2.5% did not also provide support. According to Mark Carney, the Committee forecasts a 20% decrease in investments due to Brexit and the pace of rate hikes will be gradual. As a result, the pound lost 84 points (ahead of the announcement of the release, the pound rose on data on the growth of business activity in the services sector from 53.4 to 53.8).

The euro gained 14 points on the day's result, thanks to the growth in retail sales of 3.1% y/y against expectations of 2.6% y/y - as it was a month earlier. June's growth was 0.5% against expectations of 0.1%. The IHS Markit composite index of business activity in June fell from 55.8 to 56.7. German Services PMI in the final assessment for July was lowered from 53.5 to 53.1. However, US indices of moods showed a decrease: ISM Non-Manufacturing PMI in July was 53.9 against 57.4 earlier. But this index was opposed by Markit's assessment, as the final evaluation of the upgraded Services PMI was from 54.2 to 54.7. Other data on the US were also released: June factory orders rose 3.0% against expectations of 2.9% while the number of applications for unemployment benefits was 240,000 against expectations of 242,000. According to Challenger, the number of cuts in corporate workers decreased from -19.3% y/y to -37.6% y/y. This, of course, is a good sign ahead of today's data on unemployment. The forecasts are positive: the unemployment rate forecast is 4.3% against 4.4% earlier, the number of jobs outside the agricultural sector is expected to be 181,000, while an increase in the average hourly wage could be 0.3% m/m. Also, a positive change is expected for the US trade balance: a negative balance in June is expected to decrease from -46.5 billion dollars to -43.9 billion.

As a result, we are waiting for the euro at 1.1780 while the pound sterling at 1.3050.

AUD/USD

Officials of the Reserve Bank of Australia have seriously taken up verbal interventions. Following the initial strike immediately after the RBA meeting on Tuesday, Ian Harper joined in yesterday, he said that the growth of the Australian dollar is harmful to the national economy. However, as it was two days ago, the market reacted weakly towards comments. Today, the RBA published a forecast for the economy and the monetary policy with negative estimates for the medium term, but here the "Aussie" did not show aspirations. The forecast for GDP for the current year was reduced to 2.5% from 3.0% earlier, while for the first half of 2018 the forecast was lowered to 3.0% y/y from 3.25% y/y. On inflation, the forecast was slightly raised to 2.25% y/y from 2.0% y/y in the middle of next year.

Current economic indicators are not encouraging. Data on the trade balance for June fell as compared to the previous month's surplus of 2.024 billion dollars (revised lower from 2.47 billion). Exports fell 1.0%, imports increased 2.0% MoM. Retail sales added 0.3% in June against expectations of 0.2%.

In China, the index of business activity in the service sector from Caixin fell from 51.6 to 51.5 in July. Asian stock indexes today are declining against the background of yesterday's mixed closing of US equities. South Korea's Kospi SEU (0.18%) and the Indonesian JKSE (0.24%) were better.

However, despite the ostentatious optimism, the "Aussie" does not come out of the comfortable range of 0.7890-0.7970, which we noted in previous reviews, from the second half of July, and if so, investors are waiting for US data on labor and are mentally prepared for selling. We are waiting for a decrease to 0.7830.