Apparently a fermented tea concoction named Kombucha is going to be the latest craze this summer, if you’re at all interested. It will no doubt replace coconut water as a drink of choice then disappear quicker than someone visiting North Korea for their summer holidays.
Speaking of disappearing quickly, so have the levels on GBP/EUR. The Single Currency took a beating against Sterling similar to one Mike Tyson used to give out to opponents. If you are a EUR buyer from GBP please look at 1.30 on a market order basis. You can see the move higher on the graph below.
There will be a lot of resistance at 1.30 the figure so if you can achieve that over the next week I would suggest it is a good level to achieve considering we were in the 1.26’s early last week. Please contact myself or a member of the trading team to implement a market order. If you have an immediate requirement then look to cover off a sizeable portion of your exposure on a SPOT basis after the recent upside rally. You are around 2% better off than the beginning of last week.
If you are a seller of Euro’s into Sterling I would consider locking in some of your exposure relatively soon. Yes, we’ve moved up again although it isn’t anywhere near the 1.40 levels. I expect us to drop off slightly on GBP/EUR in the coming weeks although after June 23rd then your guess is as good as mine. I would look at placing market orders to the downside to take advantage of any retracement in the recent move we’ve had. Please contact me to discuss levels that will be appropriate to aim for.
GBP/USD is now proving interesting after the sustained downside move we’ve had recently. Cable (GBP/USD) shifted sharply higher last week after a Poll suggested that the ‘remain campaign’ were clear favourites. You can see the sharp move on the graph below –
We’re going to have numerous polls saying up, down, in, out, do the Hokey Cokey and turn around for the next 4 weeks. It is already tedious so another 4 weeks of this and I might start drinking Kombucha tea to mix things up a little. I think the move on GBP/USD will run out of steam and we’ll be back challenging around 1.42 before not too long. We had a more hawkish tone from the Federal Reserve last week and a question the market will start to focus on soon will be that of a rate rise in the US. Will they or won’t they in June? If they do, then expect a strengthening US Dollar. At present the markets are driven more by politics and sentiment than anything else. I think Sterling will come off over the next month then after June 23rd we’ll see a move higher in the Pound. If you are a USD buyer consider purchasing a significant amount on a SPOT basis. Please contact myself or a member of the trading team for a rate of exchange.
GBP/AUD has pushed up significantly over the past two weeks after a weakening Aussie Dollar due to a rate cut and inflation outlook cut by the RBA. Looking at the graph below we can see it has shifted higher and may have peaked. If you have a requirement to purchase AUD from GBP please get in touch and take advantage of the move higher.
We have the RBA Governor speaking tomorrow and it is a week of numerous Central Bank Officials speaking. We have Janet Yellen speaking on Friday afternoon that will give us a further idea on US Dollar direction in addition to the release of durable goods orders this week. Out of the UK we have preliminary GDP figures released although other than that it is a fairly quiet week on the UK front.
If you have any questions please do let me know.
Have a fantastic week.
Written by Liam Alexander