- GBP/USD is the joint best performing G10 currency on Wednesday along with NZD.
- However, FX markets are mostly in wait-and-see mode ahead of the Fed meeting.
GBP/USD is currently trading above 1.3650, having bounced from Asian session lows near 1.3600. With the pair up roughly 0.3% so far this session, sterling is the best performing G10 currency this morning along with the New Zealand dollar.
Unlike the New Zealand dollar, which is benefiting from a strong Q3 jobs report released during the Asian session on Wednesday. It is unclear why GBP/USD outperformed on Wednesday ahead of the Fed’s highly anticipated monetary policy announcement.
In general, the foreign exchange market is mostly subdued with the other G10 majors largely unchanged. Additionally traders/market participants are hesitant to place large bets ahead of the Fed meeting at 18:00GMT. Powell’s post-meeting press conference at 18:30GMT.
A significantly stronger-than-expected estimate of October’s national employment change did not affect the US dollar. (ADP, which came in at 571,000 versus forecasts of 400,000). As well as a significantly stronger-than-expected ISM services PMI survey, also for October.
In terms of the latter, the overall index rose to 66.7, well above forecasts of 62.0. Amid a sharp rise in the business activity and new orders sub-indices. Indicating that US growth momentum has picked up sharply at the start of the fourth quarter.
Sterling’s outperformance could be a reflection of economic optimism
Sterling’s outperformance could be a reflection of economic optimism after IHS Markit released its final version of the October UK services PMI survey this morning in which the headline index got a decent upward revision to 59.1 from the previous estimate of 58.0. A substantial jump from September’s reading of 55.4.
This suggests that the UK economy’s economic growth momentum has improved as the month of October approaches. “The dominant services sector of the U.K. economy had a surprisingly good month in October with a strong pickup in overall output, job creation, new orders as businesses and consumers began to spend again unencumbered by the blockade and pandemic restrictions,” says Duncan Brock, group director of the Chartered Institute of Procurement & Supply.
In other news, Brexit remains a hot topic; British Prime Minister Boris Johnson stated on Wednesday that the United Kingdom wants “substantial” changes to the existing Northern Ireland Protocol. The U.K. economy’s dominant services sector had a surprisingly good month in October with a strong pickup in overall output,
job creation and new orders as businesses and consumers began to spend again unencumbered by the blockade and pandemic restrictions.”
Elsewhere, Brexit remains in the headlines; British Prime Minister Boris Johnson said Wednesday that the U.K. wants “substantial” changes to the existing Northern Ireland Protocol.
Political analysts expect the UK to trigger Article 16 soon
Political analysts anticipate that the United Kingdom will soon invoke Article 16, which allows the United Kingdom to take unilateral action on the agreement. If it believes that implementing the protocol will have serious negative consequences. EU leaders have warned the UK not to take that step, as it could lead to more tense negotiations on trade and legal issues. As well as jeopardizing the ongoing fisheries dispute between the UK and France.
However, the tone of the news on the latter dispute has improved in recent days. After the French decided not to impose retaliatory measures on UK overfishing access and French government ministers recently praised the UK government’s constructive approach to fisheries discussions.
Looking ahead, traders won’t have much time to rest after Wednesday’s Fed event. As focus will shift to a live Bank of England meeting on Thursday, where economists are split on whether the bank will raise rates by 15 basis points.
Microsoft clearly engages in the metaverse using Q2 earnings call
Satya Nadella, CEO of Microsoft, revealed his vision for the metaverse at the company’s Q2 2022 earnings call.
Overall, the company’s Q2 2022 filing showed a significant increase in cloud-based services. Microsoft reported $51.7 billion in revenue, a 20% increase over the previous year. Intelligent Cloud revenue was $18.3 billion, a 26 percent increase over the previous year. Azure drove a 29 percent increase in sales for server goods and cloud services. As well as a 46 percent increase in revenue for other cloud services.
Among the trends noted by Nadella on the earnings call was a “structural shift in PC demand.”
According to Microsoft CFO Amy Hood, Windows revenue from PC manufacturers increased by 25%, which was “far over expectations”. She stated that demand was being driven by the PC market’s success, particularly in the commercial category.
According to an earnings call transcript obtained on the financial blog site Seeking Alpha, Nadella envisions the metaverse as the next wave of the Internet. “Just as the initial wave of the Internet has allowed anyone to construct a website, I believe the next wave of the Internet will be a more open world where people, whether companies, game developers, or anyone else, may create their own metaverse world,” he stated.
“The first place we see this is the increasing digitization of people, places, and things to truly enable organizations automate operations at the next level,” he explained. “So, today, we have a number of examples of customers engaging with us through Azure IoT, Digital Twins, and Mesh. So that’s what you’ll see in Azure, and we’re investing heavily on it.”
Nadella sees prospects for Dynamics 365 Connected Spaces further up the software stack. This in-development technology is to control physical operations in physical areas such as a store, a connected factory, or a building. “We now have a suite that powers entirely by connected spaces,” he explained. Microsoft’s goal, he noted, is to automate physical operations.
Style.me introduces its wearable NFTs in the metaverse
Style.me, the industry-leading 3D fashion technology company, has launched a new innovative offering that enables designers to become metaverse-capable creators. In addition this latest step extends the company’s solutions into the world of digital fashion and NFTs. Moreover building on its growing success in virtual fitting and styling.
The company Style.me mints and distributes fashion NFTs
Style.me creates and distributes fashion NFTs, allowing people to wear, share, and use them across the metaverse. In addition, the company gives its partners the ability to bring their physical collections into the digital realm through bespoke “phygital” experiences.
The company Style.me’s plug-and-play technologies will allow metaverse projects to make digital fashion accessible to their communities. New experiences, such as virtual runway presentations, exhibitions, and live events, will be possible for designers and companies.
Style.me, with its 3D and AR technologies, is at the forefront of making digital fashion more accessible
Fashion NFT utilities are now limited, and Style.me is at the forefront of making digital fashion more accessible with its 3D and AR technology.
Style.me’s President, Rufus Parkinson, stated. “Style.me’s mission has been to enable consumers to see and interact with fashion in the digital environment since its inception. We believe that digital fashion and NFTs will alter the industry by allowing us to leverage our patented technology to open up a new dimension of user experiences.”
Combined with blockchain technology and the rapid expansion of the metaverse, digital fashion will explode in the next few years. Morgan Stanley estimates that the premium digital fashion sector alone will reach $20 billion by 2030.
Style.me’s goods are already in high demand, with consumption rising 386 percent in the last year, and this additional fashion NFT offering offers up even more prospects for growth in the digital fashion industry.
Metaverse: Tencent is updating QQ with the Unreal game engine
According to an upgraded version of the program, Tencent Holdings has stealthily integrated the Unreal Engine video game engine into its increasingly obsolete QQ messaging network. Hence, analysts believe the move is part of the social media and gaming giant’s entrance into the metaverse.
According to LibChecker, a third-party app inspection tool, the Shenzhen-based company updated QQ last month. The new version, which was formerly a chat app, includes portions of the Unreal Engine video game engine.
Tencent launched a new app feature called Super QQ Show, which is a 3D interactive arena where users can socialize, watch shows, and play games, at the same time as the update. As a result, observers claim the move is Tencent’s latest attempt to establish a footprint in the metaverse.
The decision also demonstrates Tencent’s commitment to resuscitate QQ, its second most popular messaging platform behind WeChat with 590 million monthly active users, which had fallen out of favor in recent years as Chinese netizens shifted their attention to short videos and other platforms.
In China, the metaverse is gaining traction. Although the country has not yet developed a national plan for the concept, like South Korea has, officials in some key cities have pushed businesses to investigate it. For example, one of four frontiers to explore in Shanghai’s future five-year plan is the metaverse.
The Super QQ Show is currently under testing by a small number of users. Tencent staff uploaded screenshots and video footage of the functionality. Which shows players dressing up their avatars in 3D, decorating their homes, and visiting others. Thus similar to Nintendo’s Animal Crossing video game franchise.
The Unreal Engine is utilized in successful games such as Bioshock and Mass Effect. Tencent owns a 40% share in Epic Games, which operates the engine in the United States. Last year, Epic Games was one of the first worldwide tech behemoths to make metaverse development a top priority. Epic’s flagship game, Fortnite, considered as one of the market’s leading metaverse initiatives.
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