BoE in Focus Today, Stocks Pump, While Oil Drops

In the FX market, the US dollar remains in a short-term downtrend, but overall, the situation still looks bullish as the EURUSD pair has failed to jump above the strong resistance near 1.0260.

BoE is ready to hike again

In an effort to combat inflation, which reached 9.4% in June, a record 40-year high, the Bank of England is set to hike interest rates later today by the most significant amount since 1995.

The BoE has already increased borrowing prices five times since December. It is generally anticipated that it will raise its benchmark rate by half a percentage point to 1.75%, which would be the highest level since late 2008, at the beginning of the global financial crisis.

Meanwhile, a 75 basis point rate rise for September was once again on the table in the US after many US Federal Reserve officials invalidated the market’s view that the Fed is not yet finished with its rapid tightening. Nevertheless, US equity indices soared massively, with the Nasdaq index adding 3% and closing at its highest level in three months.

Oil posts new lows

Elsewhere, the WTI oil dropped below July’s lows, completely erasing all the war gains since Putin’s invasion of Ukraine in February. OPEC+, or the Organization of Petroleum Exporting Countries and its partners, decided to boost output by 100,000 barrels per day from September.

Following the United States’ request that the OPEC+ raise output, the group’s output objective was modestly increased, amounting to around 0.1% of the world’s oil consumption. But given that demand projections are consistently being revised downward, signaling that the global market will stay tight, it is unlikely to make much of an impact.