A Week on the Market: Dollar Fears Not, Pound at Its Minimums

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Cryptocurrencies need regulating - Mnuchin


The US Secretary of the Treasury Steven Mnuchin thinks that millions of dollars are laundered via cryptocurrencies. In this light he considers it necessary to introduce regulations to the cryptocurrency market same as to normal financial services, which means rather tough regulations.

However, in order to start regulating the market, it is necessary to specify the cryptocurrency status first. On the other hand, the regulators should be sure that cryptocurrenies are spent for lawful purposes only. Here, again, we have more question than answers.

Any mentioning of shadow trades on the cryptocurrency market and talks on the necessity of a firm hand there usually makes the buyer activity subside and applies pressure to the prices.

The pound is at its two-year minimums


For the British pound the exacerbation of the position of the candidate for the Conservative leader on Brexit becomes an additional source of stress. The main position implies that Britain’s exit from the European Union can be realized without an agreement on the transition period, which automatically creates stressful conditions for British economy.

The market fears that Brexit without the agreement will give way to a massive flow-out of capital from the country, because the procedures will not be specified. For the British a lack of a structured plan is, perhaps, a bigger stress than Brexit itself. The pound in pair with the dollar is falling towards the minimum of two years, threatening to weaken even more.

The dollar can bear against the statistics


The latest statistics from the USA alleviate the market fear of the quick decrease of interest rate on the Fed’s session in July. For example, retail sales in the US grew by 0.4% (calculated monthly) in July, surplussing the forecasts, which is a good signal. The preliminary consumer trust index from the University of Michigan in July has grew to 98.4 points against 98.2 points previously, which is also a positive sign. The real estate market, unfortunately, failed to keep its positions in June and let the digits worsen slightly; however, this may be assigned to the seasonal factor of activity decline. Anyway, presently the market waits for the decrease of the interest rate by 25 basic points on the Fed’s session in July; the results of the September session are unknown, and all the above supports the dollar.

Oil: captured by volatility


The commodity market remains in the state of increased mobility. Either Iran captures the oil tankers in the Strait of Hormuz, or the USA shoot down the Iranian unmanned aircraft that threatened the safety of vessels. The prices for the black gold grow swiftly and fall accordingly. Such speculative moments are used actively by investors, which leads to significant fluctuations of prices on the market.

Pepsi: heading for Africa


Among corporate news the piece that attracts attention is the news that an American producer of sparkling drinks and crisps PepsiCo has purchased South-African Pioneer Foods. This means that Pepsi sees some perspective in Africa regardless of its unstable market and unclear economic and social situation. It will be easy to gain a market share on the continent, which will become a good support for Pepsi stocks.

Disclaimer. Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held Company for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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