The British Pound dropped to a five-year low against the US dollar on Friday as expectations rise for a US-UK interest rate paths diversion. Sterling dropped down to $1.46983, its lowest level since June of 2010. The euro also lost further ground, reaching a fresh low of $1.04612. ECB President Draghi will speak on Monday at a summit in Frankfurt scheduled for 18:45 GMT.
A Central Banker said on Monday that the Reserve Bank of Australia is working with the Australian Securities & Investment Commission to replace the Bank Bill Swap Rate (BBSW) by creating a risk-free interest rate benchmark for the local market. The Australian Index ASX (Sydney200) was down 0.1% early on Monday. The Monetary Policy Meeting Minutes are expected to be released at 00:30 GMT on Tuesday. More importantly, the Bank of Japan will release its Monetary Policy Statement and hold a press conference early tomorrow.
US crude oil dropped more than 2% on a stronger dollar and due to fears that the United States may run out of storage; oil is sharply falling to a six-year low. Gold was also pushed to a three-month low early on Monday as the dollar keeps strong at 12-year highs. The Federal Reserve’s policy-making committee will meet this week and expectations are rising for a policy tightening, maybe even as soon as June. Everyone is looking for a hint regarding the exact timing of the rate hike.