ACM UPDATE MONDAY 23RD SEPTEMBER 2019

When ‘Brexit’ eventually does/doesn’t happen on 31st October it will merely be a one day ‘event’. If we think that will be the end of ‘Brexit’ related news dominating every facet of the media and indeed British life then I think we’ll be disappointed. The conversation and implications will continue for the next decade. Maybe we should all abscond and live on the mythical Love Island where reality doesn’t exist? It might be less tedious.

Sterling rallied last week. Largely this was on the back of Jean-Claude Juncker saying a deal was possible. Sterling/Dollar (Cable) rallied through 1.25 the figure although has since given up some of those gains. We’re trading in the low 1.24s this morning.

You can view the movements on the graph below –

GBPUSD 23092019.JPG

Where now for Sterling/Dollar? Higher or lower? It’s like Bruce Forsyth’s play your cards right game show. With the ‘Brexit’ clock counting down ever faster movements are going to be more severe in the coming weeks. Please make sure you have spoken to one of our trading team whom can help put a plan in place for your requirements over the coming months.

The majority of these moves will be dictated by ‘Brexit’ news. We are fairly light on US releases this week with GDP Annualised (Q2) the only data of note out on Thursday with a print of 2% expected.

Volatility will inevitably increase the closer we get to October 31st. Will Sterling/Dollar trade at 1.10 the figure after 31st October or will we be back at 1.35/1.40 is anyone’s guess. The EU and the UK Government don’t know what the outcome of Brexit is going to be so how can anyone predict where Sterling will go? All I would suggest is you mitigate your downside risk as much as you can and then leave yourself some room to take advantage on any of the upside moves in your favour.

Please contact either your account manager or the trading department to discuss your individual requirements.

On Sterling/Euro we broke through the giddy heights of 1.13 the figure again. If you have requirements to purchase EUR from GBP do consider locking in the recent upside gains. Remember, it was a matter of weeks ago we were trading under 1.10. If you can achieve over 1.12 I think that is a good level to work off compared with recent trading ranges. Please contact the trading department for a rate of exchange.

You can view the movements on Sterling/Euro on the graph below –

GBPEUR 23092019.JPG

This week in terms of EUR related news we have the ECB President, Mario Draghi, speaking today. We had Preliminary PMI Data out earlier this morning – all figures disappointed to the downside indicating  The Euro was largely unchanged on the releases. Other than Draghi speaking today the calendar is rather light this week.

Expect heightened squabbling between our political ‘elite’ this week with the EU interjecting from time to time with positive or negative noise – this will be what largely moves Sterling.

Have a great week.

Written by Liam Alexander

written by

Liam Alexander

Liam Alexander is the CCO at Aston Currency Management.