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30th September 2014 – ACM FX Report

Is the cable downtrend set to continue? It looks increasingly so. I would suggest 1.61 may be in view in the next month. I don’t see much upside in GBP/USD apart from occasional intraday spikes. I think Dollar strength is set to continue and this will drag the pair down to 1.61 the figure by the end of October. Are you a USD buyer? I would look to place market orders so you can take advantage of any spikes we may have. Alternatively, should you know your requirement for the remainder of the year it may be worth considering covering off the rest on Spot or alternatively a Forward contract out for 3 months. It gives you peace of mind that your currency is secure and you don’t have any more downside risk.Are you a seller of USD back into GBP? Things are looking better for you than they were just two months ago. Indeed, you are some 4% better off. If you have a requirement to convert back to GBP I would look to stagger your requirements at 1.63/1.6250/1.62 to try and achieve one of these levels. Please contact myself or one of the trading team to discuss your requirements.

GBP/EUR? Well, after the initial push higher we’ve retreated to the downside however I think this is a consolidative move rather than any significant change of direction. I expect further EUR weakness and with EUR/USD continuing its push lower I see no reason why GBP/EUR won’t push higher again. I would stagger market orders from 1.2750-1.2850. I think this will be the range for the next few weeks. After the recent volatility I expect more range bound activity over the coming weeks. I am sure some of you will be thinking “It’s going to go to 1.30”. It may well of course do. However, anyone that has had to deal with GBP/EUR and its penchant for tantrums over the years will know that we could be under 1.25 again quite easily. Do I think we’ll drop that far? No. I don’t see anything to suggest Sterling will be on the back foot although I don’t see any signs where Sterling is going to get a boost either. We’re at the mercy of the Eurozone/data/Draghi and general sentiment on the Euro. I believe the sentiment is to see the single currency lower so I will suggest we’ll get back to 1.2850 and potentially reach 1.29 in October. I think 1.30 will be a push however we may reach that level by the end of 2014. Feel lucky? Put a market order in at 1.30. We may clip that for you although there will be a lot of resistance at 1.30 the figure.

We have a heavy data week that may affect the EUR and US Dollar and in turn Sterling. Today we have unemployment data out of Germany. That is followed by inflation data in the form of CPI from the Eurozone. Should we have a poor figure then expect GBP/EUR to move higher. Across the pond tomorrow afternoon we have Consumer Confidence data out of the US. I would expect this to be strong number and the continuing good news out of the US will push Cable potentially under 1.62. Wednesday, we have GDP data from the Eurozone and ISM data out of the USD. These data releases have the capacity to move things. However, Thursday and Friday is where it may get interesting. Please contact us prior to Thursday should you be considering implementing market orders. The reason being? We have the ECB press conference on Thursday with Draghi speaking and I expect him to ‘talk down’ the single currency again. There is potential for a move higher. As always, with these events, there is increased volatility and the rate can change dramatically throughout the press conference. After his surprise with rates last time I expect that to remain as is. The Dollar is the currency in the limelight at the moment and all attention (as it always is on the first Friday of every month) will be on the NFP (Non-Farm payroll) figure. Will it be better than expected or will it disappoint? There will be increased volatility around this number and whether you are a USD seller or buyer you should have something in place prior to these events. As I often say, doing nothing is speculating.

Should you have any questions please let myself or one of the team know.

Have a great week.

Written by Liam Alexander

22nd September 2014 – ACM FX Report

As thoughts move to overcoats with the turning of the weather all eyes are on Sterling. Will the volatility of the past few weeks give way to range bound (dull) activity? To a point. With the referendum, or the ‘neverendum’ as a friend named it, dominating headlines a move away from this is welcome.  The political moves and promises will need to be stuck to or Sterling could prove turbulent again however I think there is genuine desire from the ‘Westminster elite’ to do the right thing. Time will tell.I still maintain my 12 month forecast that GBP/USD will be under 1.60 by year end. I don’t see too much more upside for GBP in the remaining months of 2014 against the US Dollar. I believe we’ll see a stronger US Dollar and although the fundamentals for the pound remain moderately strong, upside will be limited. You should look at working market orders to take advantage of any spikes on Cable (GBP/USD) on an intraday basis. Please contact myself or one of the trading team to discuss a strategy for the remainder of 2014.

I believe the main moves over the remainder of the year are going to be determined by a stable Pound, a stronger Dollar, and a weaker Euro. Indeed, last month Sterling strengthened 1%, the Dollar rose 3.1% and the single currency dropped 1%. I expect this trend to continue although the pace of these moves may be tempered by a period of profit taking in the markets, particularly this week.

So in short, what does this mean for GBP/EUR, GBP/USD and EUR/USD for the remainder of the year? I believe we’ll see GBP/EUR higher, GBP/USD lower and EUR/USD lower. As always the main movement will be through the EUR/USD pair and this will impact GBP/EUR and cable. As discussed in previous reports I believe the ECB and Draghi want a weaker single currency. It would not surprise me if EUR/USD was under 1.25 in the next month or so.

If you are EUR buyer from GBP look at ‘averaging’ up your rate of exchange through market orders. Stagger them at various levels so you are continually improving your rate of exchange whilst mitigating some of your risk by reducing your exposure. As I’ve said before, doing nothing is speculating.

What do we have out this week in terms of data? We have the ECB president Mario Draghi speaking at 2pm (UK time) today so that should provide us with some volatility. I would expect further weakness for the single currency so if you have a EUR requirement today please have something in place prior to this. We are very quiet on data this week with only the GDP (Q2) figure out from our neighbours across the pond on Friday being of note. As stated above the recent moves and volatility in the market may be replaced by a level of calm this week. However, with geo-political events dominating the news from Russia to West Africa to the UK, any commentary could prove to move the markets.

If you have any questions on implementing a strategy for the remainder of Q4 and into Q1 next year please do let me know.

Have a great week.

Written by Liam Alexander

16th September 2014 – ACM FX Report – Decision Time for Scotland

Sterling is under pressure today. We fell to the lowest level against the US Dollar in 10 months as a report showed UK inflation slowed to match the lowest level in five years. Indeed, Sterling has dropped over 3% against the US Dollar in a month. Will this drop continue? It is of course all dependent on the Scottish vote and result on Thursday evening and into Friday morning. If it is a ‘Yes’ vote then, well, who knows how far it can drop. Various analysts and economists are predicting a 5-10% drop for Sterling in the event of a ‘yes’ vote. Should it be a ‘no’ vote I think much of the inevitable move higher has been priced in so we may see a 1-2% move higher at the most. Let us come back to the Scottish referendum and its implications later.We had a poor ZEW figure released today from Germany today. It hasn’t had too much of a negative effect on the single currency as market participants are looking at the FOMC minutes tomorrow as much more pertinent for EUR/USD. Indeed, it is thought that the FOMC will be of the opinion that the asset purchase program may come to its conclusion at the end of October. Even with the progressive growth the US economy has seen (it was always going to come back) I think interest rates will only be raised, gradually, over a two year period starting from next year as there is still some give in the labour force and no real evidence of inflation. It will be interesting to hear the comments tomorrow evening (UK) time. We have been in very tight ranges this week with a very much ‘wait and see’ attitude from investors and traders. It has been lacklustre.

Tomorrow is the start of the week for currency markets. The start to a potentially quite historic week. We have the Bank of England minutes released at 09.30am tomorrow morning along with the Claimant count and ILO unemployment rate. Sterling will, I imagine, be volatile for the rest of the week. The UK data is followed by CPI data (inflation) released from the Eurozone which will move the single currency. If it is strong it could push GBP/EUR lower still. Short-term, I am not seeing too much upside for Sterling crosses. I would look, more than ever, at being risk adverse and locking in your exposure this week prior to Friday.  Please contact myself or one of the trading team to discuss a strategy for the rest of this week. You may well save yourself thousands if not tens of thousands of pounds by doing this.

Scotland

The vote in Scotland is taking place on Thursday. I am sure everyone is aware of this. The result is expected between 5-7am on Friday morning. Thursday and Friday will be a couple of exceptional and indeed historic days regardless of the outcome. They also have the potential to be the most volatile days for Sterling in living memory.

Our suggestion to our clients who have a transactional requirement for GBP/EUR/USD is to put a strategy in place now to protect themselves. If it is a ‘YES’ vote then Sterling may fall up to a further 10%! That will put us in the 1.40s on GBP/USD. What will that do to your profits and for pricing for the rest of the year and into Q1 2015? Regardless of your leanings and view there will be movement in currencies. If it is a ‘NO’ vote then Sterling is expected to bounce 2-4%. However, I think a lot of that move is priced in already so upside I think is limited to a 2% spike higher. I personally feel that a ‘No’ vote will just come through but as we’ve all seen in the polls, this is too close to call.

How are you going to protect yourself? How are you going to take advantage of the movement? Have you thought about placing a market order? Market orders work best when there is heightened volatility. Well, this week will certainly provide that! Please contact myself or one of the trading team to implement a strategy as this is going to truly be an exciting and historic end to the week.

Written by Liam Alexander

Currency Update - Panic in Westminster?

UK party leaders have flown to Edinburgh to put their weight behind the ‘NO’ vote. Is it too little too late? Will it be perceived as a desperate measure? I think they’re damned if they do damned if they don’t. One thing is for sure - this is going to be the main headline and driver for Sterling up until voting day. Should it be a YES vote then the following day, who knows what will happen!?  Sterling is still pressured to the downside and I think this will continue for the next 8 days.We have Inflation report hearings out of the UK this afternoon that may cause further volatility for Sterling. The Eurozone has almost taken a back seat on the news front. I still expect considerable EUR weakness in the next few months. EUR/USD has dropped around 1.40 down to below 1.30. I expect this fall to continue and we’ll see EUR/USD around 1.20 in the next 6 months.

GBP/EUR has fallen off from recent highs however we’re still at very attractive levels. I would suggest looking at covering off your exposure before the vote next week. Could Sterling drop by 5%? Quite possibly. It may of course do nothing at all and remain in the same range. However, I would be surprised if that is the case. Therefore, it would be prudent to have something in place. Please contact myself or one of the trading team to have a discussion on how we can best assist.

Written by Liam Alexander

Currency Update

Sterling has dropped further this morning against the US Dollar. Indeed, it has dropped 3% from where we were a week ago. Evidently sentiment and the prospect of an independent Scotland is driving the pound lower. Is it more of a reactive emotional move rather than a fundamental downside move though? I think after the weekend reports we may see GBP/USD settle slightly and hold around 1.60/1.61 however if we break below the key resistance level of 1.60 then it opens the door to not only 1.55 but potentially the low 1.50s dependent on the vote in 9 days’ time.  However, today may provide some respite for Sterling. Mark Carney, Governor of the BoE, is speaking today so he may make some positive noises that may shift some of the focus. Indeed, if the data comes out better than expected then we may actually see a nice bounce higher. If you are a USD buyer please implement a market order and try and catch any spikes on an intraday basis. I still believe we’ll see GBP/USD lower. Notwithstanding the negativity and uncertainty surrounding the pound our cousins over the pond are betting on economic reports released later this week will give credence to the case that the Federal reserve may boost interest rates next year. Interestingly, Fed policymakers meet on September 16th-17th. A day before Scotland votes. I would suggest you need to have a plan in place prior to these dates as we may be in for volatility we haven’t seen in a long long time. GBP/USD may gain 5 cents in a day. It may lose 5 cents in a day. Or it may do absolutely nothing. Please do however plan for the worst and have a strategy in place. Doing nothing is speculating.If you have any questions or would like to speak with one of the team at Aston please get in touch.

Written by Liam Alexander

09th September 2014 – ACM FX Report - Scottish Independence

As the weeks go on my prediction at the start of 2014 for 1.60 on GBP/USD before year end has suddenly come into sharp focus. I am going to revise that down further to 1.55. Why? A whole number of factors not least the Scottish independence vote to be held in 10 days’ time. As many of you will I’m sure have read over the weekend the ‘YES’ vote is now in the ascendency and has a 2 percentage point lead. Now, this ‘lead’ is tentative to say the least dependent on the particular poll you read however what can’t be argued is that the nationalists have clawed back a quite remarkable amount of ground in the past month. Is this a result of Salmond the orator or a weak campaign from the ‘better together’ vote? No matter what, an independent Scotland is now a real possibility and if you read the polls then dare I say it, the most likely outcome.Sentiment has as much a part to play in votes as they do in currency movements. With nine days to go and with the recent poll will the people of Scotland be swept along into ‘the time is now’ feeling or will the poll have shocked the ‘better together’ campaign into upping their efforts to keep the UK together? Regardless of the outcome of the vote in ten days’ time one thing the markets don’t like is uncertainty. Well, Sterling has and is going to get wheelbarrows of it over the next nine days. Should the independence vote be cast then who knows what that will do to Sterling? Answers on a postcard please. My point is, Sterling could drop substantially or nothing much might happen at all. I would however suggest you have a risk averse strategy in place if it is the former.

Will Scotland be allowed to keep Sterling and be part of a currency union? According to George Osborne, unequivocally not. What will this mean for companies in Scotland or for any clients that you deal with north of the border? There are so many variables that I believe it can only weigh on Sterling and hence push GBP lower short-term. GBP/USD is still at attractive levels however looking at it from a historical average perspective, so if you have a requirement to purchase USD I would suggest looking at covering off at least 50% of your exposure now.

As you’ve probably guessed from the above I only think GBP/USD is going one way. Down. I may of course be wrong on this and as some have suggested the move may already have been priced in and if there is a ‘NO’ vote then Cable may bounce higher. It is an unknown so it is best to be risk averse. Please contact myself or one of the trading team to discuss implementing a strategy for the remainder of September or out on a 3 month basis till year end. You may want to lock in a Forward Contract on a 1 month basis perhaps then regroup as it were and look at things again in October. This way, you have taken out the risk for the rest of September.

GBP/EUR? This is slightly harder to call. Sterling has taken a hit after the weekend headlines. However, as I have suggested the previous few weeks I think the EUR will become far weaker. Indeed, I suggested EUR/USD will be around 1.20 in 6 months’ time and this will drag GBP/EUR higher in the medium term. Short-term, GBP/EUR will be under pressure due to the impending Scottish vote in the UK. I would suggest market orders on GBP/EUR for the next few months to take advantage of any spikes in GBP/EUR. I think Draghi and the ECB will push the single currency lower and as I suggested last Monday I am sure you’ll hear various Government ‘officials/members/experts’ talking the currency down to get it to where they want it to be to stave off deflationary pressures. Draghi launched a package of measures to try and kick start the Eurozone recovery (I’m sure I have written the phrase ‘kickstart the Eurozone recovery’ at least 50 times in the past 6 years) that will ultimately lead to a full QE program.

We will have various data releases out this week however over the next nine days Sterling will be pushed left right up and down on the back of political statements, polls and general sentiment relating to the Scottish independence vote.

If you didn’t think the Scottish independence vote would affect you please now think of it as effecting you from a currency and FX perspective and ultimately a monetary perspective for your business.

If you have any questions or I/we can be of assistance please feel free to get in touch.

Written by Liam Alexander

01st September 2014 – ACM FX Report

The beach towels have been put away for another year. Out of office messages will be switched off and the summer lull of inactivity will come to a close. This should mean we’ll have some volatility return to the currency markets with traders/investors back at their desks and liquidity returning to the market. Range bound activity was becoming very dull to say the least.Let us start off with Sterling’s dear old nemesis the Euro. I believe that the dynamics of the Euro have fundamentally changed.

I think the ECB and Draghi now want the EUR weaker and I believe you will hear comments from various central bank officials ‘talking down’ the single currency over the next few months. Isn’t it funny when a central bank wants a currency weaker that these statements/utterances are played out to the media? Perhaps I’m too cynical and all these things are simply a coincidence.

If you look at Draghi’s August Press conference he stated “fundamentals for a weaker exchange rate are today much better than they were two or three months ago”. I’d suggest a weaker Euro isn’t too far off and I’d suggest it will be significantly weaker in 6 months’ time.

What does that mean for GBP/EUR over the remainder of the year? It is an opportunity, if you have a GBP/EUR exposure, to secure the remainder at advantageous levels. I would place market orders and stagger them at various levels so you ‘average up’ your rate along the way. This is a more risk averse strategy whilst still providing you with the upside to improve your exchange rate. By all means you can place an order at say 1.28 however what if it doesn’t get there? You are best off staggering ‘X’ amount of your exposure at levels up to 1.28 and then closing off more when we reach that level. The phrase “don’t have all your eggs in one basket” applies here.

So what of GBP/USD? Well, I said at the beginning of the year that I thought GBP/USD would be around, if not under, 1.60 by the end of 2014. I don’t see much evidence to make me change my view so I will maintain 1.60 as my 12 month forecast. We’ve dropped into the 1.65s recently which is quite a shift in the past few weeks from where we were. I expect the US Dollar to continue its recent bullish moves against both Sterling and also the Euro. I believe the cable move (GBP/USD) will be less pronounced than the EUR/USD move. The simple reason being that I believe US data will continue its cyclical outperformance against its G10 counterparts. In addition, the UK and US have strong growth trajectory whilst Europe, to me, are much like Manchester United at present. They have the tools to get themselves out of this mess however the longer it continues to meander along the less likely a suitable conclusion will be reached.

I feel we’ve had the UK push in recent months and so therefore Sterling upside will be limited against the Dollar while I expect further strong data to come out of the US hence sticking to my original forecast. If you are a USD buyer from GBP I would suggest covering off some of your exposure on either a Spot or Market order basis as I believe the rate will only get worse for you. This is of course my opinion and it is ultimately your commercial decision when and how to execute your transactions. If you are a USD seller, then you may have some better exchange rates coming your way over the next 3 months. As I always suggest mix being risk averse whilst allowing some upside potential. Place market orders on USD/GBP at various levels. Please contact myself directly or one of the team to implement these.

The ECB policy meeting on Thursday will be the main focus of the markets attention this week along with the NFP figure from the US on Friday (Non-Farm payroll). As usual the MPC meeting will be a damp squib. August data will be roughly in line with expectations and we’ll see Sterling remain relatively comfortable although upside will be limited, especially on GBP/USD.

The NFP figure will provide some volatility on Friday on USD pairs so if you have an exposure then you may wish to consider having a strategy in place.

If you have any questions please contact myself directly or one of the team.

Have a great week.

Written by Liam Alexander

18th August 2014 – ACM FX Report

What direction now for GBP/USD? Will we have a bounce and target the 1.70 level or are we on our way back to 1.60? I believe the recent downward trend will continue and we'll be around 1.60 towards the end of 2014. I maintain the view that I've had since the beginning of the year. Indeed, Sterling was one of the worst performing currencies last week and only outperformed the Turkish Lira and Israeli Shekel. I would suggest with recent geopolitical events in those regions that wasn't too difficult a task.  If you are a US Dollar buyer and you have capacity to cover off your exposure at current levels I would suggest you should take advantage and lock in a forward contract. Ultimately of course,  it is your decision when to implement any transaction. If you haven't utilised a Forward Contract yet please contact one of the trading team and they will be happy to assist.Sterling has had a shift up this morning on the back of some comments from Mark Carney in The Sunday Times yesterday. The key points to take away were that the BoE have confidence wages will go up (even though they're in negative territory now), any rate increases, whenever they may be, will be slow and steady. The main point however wasn't cold hard figures but rather the lack of dissent between the members of the MPC. (No member has voted against Carney since he became Governor last year). Could some members of the MPC be less dovish than Carney? The BOE minutes will be key on Wednesday. Should we have a unanimous vote then the market may be disappointed and we may see Sterling continue its downward trend and we could be targeting 1.65. Should we have a dissenter then we may edge higher. Movements this week will be determined by the minutes so I would suggest having a strategy in place prior to the minutes on Wednesday. Why? Should we spike up you should have a market order in place to take advantage of the volatility around the release. Please contact myself or one of the trading team to discuss the implementation of an order and relevant levels to aim for.

We also have the FOMC minutes released on Wednesday so should we have some bullish rhetoric from Yellen GBP/USD could be pushed down further.

What of our favourite yet most frustrating currency pair, GBP/EUR? After having dazzled us with the push higher it was akin to Louis Van Gaal's first game in charge of Manchester United. A lot of good hard graft to get to the required level and when we got there it couldn't do the business and push on any further and so slumped. Perhaps too harsh a comparison on GBP/EUR.

We are still around what I would call 'fair value' on GBP/EUR however and as alluded to above the BoE minutes could dramatically alter the direction of GBP/EUR. For those of you whom have been active in FX for a long time you will know that Sterling has an uncanny ability to crash rather faster than its more stubborn cousin of a single currency. I would look to protect yourself this week and perhaps reassess your intended target levels for market orders. Please contact one of the Aston team to discuss. If EUR/USD comes under further pressure however we may see a boost to GBP/EUR however I think we'll be range bound on GBP/EUR for quite a while now. Indeed, with monetary policy being much of a muchness throughout the main economies volatility has been at the lowest I can remember for a long, long time.

We have other key data released this week with UK Retail Sales and inflation data released in the form of CPI data. It will be a busy week, especially for the month of August when most traders are by a pool so liquidity is often less than normal. With Geo political events dominating the news and the question of how Putin will play out is keeping markets more active and nervous than normal for the summer months.

So, in summary, make sure you have a strategy in place this week as you could be impacted more than normal if you have an exposure on Sterling. Please give one of the Trading team a call should you have any questions.

Have a great week.

Written by Liam Alexander

5th August 2014 – ACM FX Report

Where now for GBP/EUR? As suggested last week we have had our push higher and with some UK number’s disappointing to the downside it has put Sterling under pressure with GBP/EUR coming off recent highs. I would expect a week of range bound trading unless we see a significant announcement from either the BoE On Thursday (unlikely) or Draghi says something at the ECB Press Conference. The single currency has been under pressure this month however as we all know too well it is stubborn as old boots and doesn’t give up ground without fight. To this end, I would look at covering off some of your exposure on a SPOT or Forward contract basis on GBP/EUR. If you’re waiting for that considerable jump higher then I don’t think you’ll see that until September/October. With reduced liquidity over the summer period (and the fact that volatility isn’t what it once was due to the main Central Banks’s monetary policy) then I would suggest contacting your Aston Trader to lock in a rate of exchange on either SPOT or a Forward Contract out for 1/2/3 months. Please contact myself or one of the Trading Team and we’ll be happy to assist.GBP/USD? We’re now on the back foot with the pair under pressure. At the start of the month the Dollar was the worst looking in an ugly parade however it finished up the month being 1.7% higher against Sterling. I would expect broad US Dollar strength now for the remainder of the year. As I‘ve said all year, in Q3/Q4 we’ll see the US Dollar strengthen significantly. I stick to my forecast that GBP/USD will be under 1.60 by the end of 2014. The recent FOMC statement showed that the US economy was gaining strength, the Q2 GDP report showed that the economy was growing at a stronger than expected 4% annualised rate too. However, this was tempered by a slightly disappointing US employment report on Friday so it may be a mixed week for the US Dollar with a period of consolidation likely.

For those of you whom convert GBP into USD I would look to secure as much as you can at these levels. If we look back a year to see where we were on 4th August 2013 what level do you think we were at? We were trading at around 1.52/1.53. That is well over 10 cents difference to the pound compared with current levels. A fairly significant difference I’m sure you’ll agree. Can you afford for GBP/USD to drop back to those levels and what would that do to your profit margins? I would suggest you mitigate those risks by implementing a strategy to the year end to make sure you don’t lose should GBP/USD come under further pressure. Please contact me to discuss. If you have the capacity to lock in more USD up until December I would, as the saying goes, “fill your boots”. I think Cable looks toppish and I don’t see much that suggests it has the wind in its sail to drive it higher again.

We’ve a fairly subdued week ahead in terms of data releases however as alluded to above Thursday will be the main day of the week with the BoE Interest rate decision/Asset Purchase Program released (both non-events at the moment – they’ll remain unchanged). Europe will be the focus this week and the Monetary Policy Statement followed by the conference given by Mario Draghi will provide the volatility, if we are to have some this week. Of course, ongoing Geo-Political events around the world will continue to affect currencies and with further sanctions expected to be imposed on Russia from Europe there may well be some weakness or strength for the Single currency depending on how the market interprets any “show of strength” from Europe. It is interesting times and although volatility isn’t great at the moment there can still be some significant movements on an intraday basis. I would suggest, if you haven’t already, putting a plan in place for the remainder of the year and cover off your exposure, especially if you are a USD buyer. As someone once said “doing nothing is speculating”. I would act and make sure come December time you aren’t kicking yourself that you didn’t lock in some of your USD at these levels.

On the other side of the coin, for USD sellers, please contact one of the team to discuss implementing market orders to take advantage of the downside moves. I would stagger the amounts you have to do at different levels so you offset some of your risk whilst taking advantage of the likely Dollar strength. Please contact one of the team and they’ll be happy to discuss relevant levels.

If you have any questions please don’t hesitate to contact us.

Have a great week

Written by Liam Alexander

28th July 2014 – ACM FX Report

GBP/USD has come off recent highs and is bearish to the downside at present. The pullback that we’ve had over the past week is due to broad dollar strength and some disappointing data out of the UK. The UK data was in line with expectations however due to previous data outperforming market expectations the market needs to see better than expected results to act as a catalyst to push GBP/USD higher. In short, the market needs to see a continuing strengthening of the British economy to push above recent levels. We may see some recovery attempts throughout the remainder of July and into August. What have we got out this week in terms of UK data that may give us that nudge higher? The answer? Not much unfortunately. We’ll need to look across the pond to our American friends and take the lead from as their economic reports are going to be the drivers for GBP/USD this week. Should we see any disappointing releases then this could give the impetus to push Cable back up to key resistance levels and break through and consolidate higher. I suggest placing market orders at key levels to take advantage of any intraday moves. Please contact myself or one of the Trading team at Aston to discuss applicable levels and time frames to implement these.GBP/EUR is, and I’ve not said this for a long time, the more exciting currency pair at the moment. We’ve seen a gradual, albeit painfully slow, move higher over the past few months however last week gave us some swings higher, lower, then higher again. I expect us to push another leg higher in upcoming trade. With EUR/USD coming under increasing pressure (are we heading back below 1.30?) this should give GBP/EUR the bump up it requires. As stated above, we’re limited on data releases from the UK so we’ll be looking to the Europeans and their data/speeches/releases to give us some direction. I would suggest Wednesday and the release of the Consumer Price Index will create some volatility as will unemployment data from Germany on Thursday. Please place any market orders prior to Wednesday on GBP/EUR. This week will give us some clear idea if GBP/EUR is going to retreat and consolidate to the downside or we’re going to break higher. I believe we’ll push higher hence it’s important to take advantage of these sudden spikes as they normally occur and then profit taking takes place and we gradually drop off a little.

The other data of note, and what will affect GBP/USD in particular this week along with movement on EUR//USD is the releases from the US. As always, we have the NFP figure (Non-Farm payroll) released on the first Friday of the month so this always creates movement however the key day this week will be Wednesday with the Fed Interest rate decision followed by the MBS (Mortgage-Backed Securities) purchase program - the general slowing of this program links to the general improvement of the US economy. However, the main event is of course the Monetary Policy Statement from the Fed where any comments from the FOMC will be keenly listened to. Have market orders in place prior to 5PM on Wednesday before these announcements occur.

With ongoing Geo-political events seemingly part and parcel of the economic news at present (Russia/West/Sanctions, Gaza/Aviation disasters) then global volatility is set to continue in currency and equity markets.

Please contact a member of the Aston Team to discuss a strategy for the summer months.

If you have any questions please do let us know.

Have a great week.

Written by Liam Alexander

21st July 2014 – ACM FX Report

The main focus of the currency markets this week will be the FOMC minutes released on Wednesday.  From a Macro perspective we’re light on data this week. However, there will still be the capacity for volatility. The US Dollar continues to come under pressure even though the majority of data releases have been strong (think the strong jobs report etc. last week), with the exception of the poor GDP figure. Yellen’s comments last week suggested that the Fed was in no rush to hike rates so we haven’t had any kind of support for the US Dollar. Will that change or will the US Dollar continue to weaken? As I’m sure most of you are aware GBP/USD continued its upward push last week to near 6 year highs. Will GBP/USD continue higher? I believe in the short-term that it will. If you are a dollar buyer please look to place market orders at specific levels to take advantage of any intraday moves. Please contact me to discuss. As we delve further into the summer months range trading comes to the fore with less liquidity in the market so there is potential for sideways moves rather than any sustained change of direction. However, I do expect GBP/USD to push higher so please try and take advantage of any spikes. Are you on the other side and looking to sell USD? It may be time to dust off the tin hat. As alluded to above, I think we’ll see GBP/USD push higher in the short term although I still believe we’ll see some US Dollar strength later this year. It may be a bumpy road for USD sellers up till the end of the year however I do think we’ll see some USD strength this year.GBP/EUR? I believe (FINALLY) that we’re approaching some kind of a reality check on GBP/EUR. The single currency has been markedly overvalued for numerous years now. I think Sterling still has some more gas in the tank as it were. I would look to place market orders to take advantage of further upside momentum. Please contact one of the Trading team or I to discuss. Longer term I think the EUR will continue to underperform against both the US Dollar and Sterling as the Eurozone recovery continues to lag behind the UK and the US and we’re likely to see rate hikes in the UK and US well before we see them in the Eurozone. Outside of this, data short term points to a continuing struggle on the recovery front in the Eurozone. We had disappointing German Industrial Production numbers out this morning showing a 1.8% month on month fall in May which is the third consecutive monthly drop. It shows that although the German economy can weather most storms in the Eurozone it is still not immune from outside influences that can affect order books such as geopolitical conflicts/slowing emerging market economies like China and other risk factors.

What do we have out this week in terms of data? It’s pretty much non-existent today after the Eurozone data released earlier. Tomorrow we have some Tier 2 data out of the UK in the form of Industrial and Manufacturing numbers. In the afternoon across the pond we have the first of many Fed speakers this week. Any surprise comments in any of the speeches will be seized upon and may shift the US Dollar in particular. As suggested above, the Fed minutes at 19.00 UK time is the event of the week and one market participants will be focused on. Thursday we’re back to the UK and the BoE Interest rate decision which is pretty much a non-event these days so don’t expect any sharp movements around the release however there will the usual volatility around it should anything surprise.

If you have a requirement on SPOT/Forward Contract or Market order basis please let me know and one of the team will be happy to assist.

Any questions please let me know.

Have a good week.

Written by Liam Alexander

7th July 2014 – ACM FX Report

The main focus of the currency markets this week will be the FOMC minutes released on Wednesday.  From a Macro perspective we’re light on data this week. However, there will still be the capacity for volatility. The US Dollar continues to come under pressure even though the majority of data releases have been strong (think the strong jobs report etc. last week), with the exception of the poor GDP figure. Yellen’s comments last week suggested that the Fed was in no rush to hike rates so we haven’t had any kind of support for the US Dollar. Will that change or will the US Dollar continue to weaken? As I’m sure most of you are aware GBP/USD continued its upward push last week to near 6 year highs. Will GBP/USD continue higher? I believe in the short-term that it will. If you are a dollar buyer please look to place market orders at specific levels to take advantage of any intraday moves. Please contact me to discuss. As we delve further into the summer months range trading comes to the fore with less liquidity in the market so there is potential for sideways moves rather than any sustained change of direction. However, I do expect GBP/USD to push higher so please try and take advantage of any spikes. Are you on the other side and looking to sell USD? It may be time to dust off the tin hat. As alluded to above, I think we’ll see GBP/USD push higher in the short term although I still believe we’ll see some US Dollar strength later this year. It may be a bumpy road for USD sellers up till the end of the year however I do think we’ll see some USD strength this year.GBP/EUR? I believe (FINALLY) that we’re approaching some kind of a reality check on GBP/EUR. The single currency has been markedly overvalued for numerous years now. I think Sterling still has some more gas in the tank as it were. I would look to place market orders to take advantage of further upside momentum. Please contact one of the Trading team or I to discuss. Longer term I think the EUR will continue to underperform against both the US Dollar and Sterling as the Eurozone recovery continues to lag behind the UK and the US and we’re likely to see rate hikes in the UK and US well before we see them in the Eurozone. Outside of this, data short term points to a continuing struggle on the recovery front in the Eurozone. We had disappointing German Industrial Production numbers out this morning showing a 1.8% month on month fall in May which is the third consecutive monthly drop. It shows that although the German economy can weather most storms in the Eurozone it is still not immune from outside influences that can affect order books such as geopolitical conflicts/slowing emerging market economies like China and other risk factors.

What do we have out this week in terms of data? It’s pretty much non-existent today after the Eurozone data released earlier. Tomorrow we have some Tier 2 data out of the UK in the form of Industrial and Manufacturing numbers. In the afternoon across the pond we have the first of many Fed speakers this week. Any surprise comments in any of the speeches will be seized upon and may shift the US Dollar in particular. As suggested above, the Fed minutes at 19.00 UK time is the event of the week and one market participants will be focused on. Thursday we’re back to the UK and the BoE Interest rate decision which is pretty much a non-event these days so don’t expect any sharp movements around the release however there will the usual volatility around it should anything surprise.

If you have a requirement on SPOT/Forward Contract or Market order basis please let me know and one of the team will be happy to assist.

Any questions please let me know.

Have a good week.

Written by Liam Alexander

9th June 2014 – ACM FX Report

GBP/EUR reached fresh highs on Thursday after the ECB introduced measures to stimulate the Eurozone economy out of its current malaise. Mario Draghi cut the deposit rate for Banks to -0.1% from Zero. In effect, it is designed to encourage Banks to lend to businesses rather than to store money. It is a version of QE as it provides stimulus to the economy. The ECB also cut the benchmark interest rate to 0.15% from 0.25%. As expected, the EUR had an enormous amount of volatility at the release of these changes and also the subsequent press conference. EUR weakened sharply and then, as sure as night follows day, it rebounded and settled at roughly the same levels. It is rather a bold move from the ECB although it was in most quarters widely expected. As detailed before, a market order is the best way to take advantage of moves on an intraday basis, especially around key events. You can place an order above the interbank Spot rate and should that level be reached it is automatically executed for you.The ECB are trying to stave off deflation and falling prices so are open to unconventional measures to boost inflation if it remains too low. It is currently sitting at 0.5%. That is well below the ECB’s target of just below 2%.  The fear of deflation is that quite simply consumers might start to spend less money because they would/may expect to fall in future months. Likewise, for pretty much the same reasons, investors may stop investing and the knock on effect of this is that growth would be hit and demand would be curtailed. Knock on effect of this? Those debts that were racked up by the Eurozone would take longer to repay. Unemployment which is already at 12% in the Eurozone as a whole and. significantly higher in the Southern Europe economies may get worse. Draghi didn’t go as far as suggesting a large asset buying program however he did say, in words that are said at seemingly every press conference that “more would be done, if necessary”. Will these unconventional measures work to lift the Eurozone out of sluggish growth? Time will tell. Do I think things are going to get better anytime soon in the Eurozone? No. We’ve been hearing the same statements since before the last World Cup. We’ll be hearing the same statements around the time of the next World Cup in 2018. “Banks and Policy Makers in the Euro-area must step up their efforts”. Yup, indeed. Will they, so that the Eurozone is ‘healed’ significantly? Unlikely. The ‘crisis’ in one form or another, is going to continue in the Eurozone for a number of years yet.

The EUR as always, is stubbornly resilient. Some range bound trading on EUR/USD and GBP/EUR will be a theme for Monday however we do have the release of the NIESR GDP estimate (3M) (May) on Tuesday that may give Sterling a boost to the upside. Should you have a requirement for EUR please contact me to discuss implementing an order at an agreed level.

What else do we have on later this week? Wednesday is an important day for Sterling with the release of Unemployment Data out of the UK. We have the ILO Unemployment Rate (3M) (Apr) at 09.30am along with the Claimant Count Change (Apr) released also. I would suggest if you have a EUR requirement then to place a market order to take advantage of any spikes in the market on the release of the aforementioned data. Please contact myself or one of the trading team to discuss a suitable level to aim for.

GBP/USD is bobbing around a tight range with no clear direction either way. It is at very good levels compared to where we were at the beginning of the year so if you know your requirement over the next two to three months now would be an ideal time to look at covering off some of your exposure on a Forward Contract.

The rest of the week data wise is fairly quiet so the main movements are likely to be Tuesday and Wednesday. Contact us to implement market orders to take advantage of the increased volatility around these announcements.

If you have any questions please do let me know.

Have a great week.

Written by Liam Alexander

2nd June 2014 – ACM FX Report

The EUR fell to a fresh 3 month low last Wednesday after some downbeat German jobs data. The ECB and the single currency will take centre stage this week on Thursday with Mario Draghi, the ECB president, expected to put in place their measure of QE to combat deflationary pressures. Will the EUR weaken further? Most of the move will have been priced in already however I expect short term EUR weakness around the statement although I expect once the market has digested the news the EUR will rebound and we’ll be back to similar levels. The expected EUR weakness should provide a good opportunity for EUR buyers from GBP. If you have a EUR exposure this week look at placing market orders at various levels to catch any spikes on an intraday basis. Please contact myself or one of the trading team to discuss implementing market orders at the appropriate levels.EUR/USD has now dropped significantly after trying and failing to break the psychological level of 1.40. I believe we’re starting to see a shift in market sentiment and as suggested in Q2, Q3 is when we’ll see a sustained shift in market sentiment and I expect the recent downtrend to continue on EUR/USD. I expect EUR/USD to be under 1.30 by the end of Q3.

The main data and market events come at the end of the week with the ECB meeting on Thursday followed by Non-Farm Data released on Friday from the US. The Bank of England Interest rate decision is released on Thursday however it is pretty much a non-event due to the forward guidance policy of Mark Carney.

In the run up to these data releases we have CPI data out of the Eurozone tomorrow that will have an effect on the single currency. Wednesday we have GDP data out of the Eurozone so we may see the single currency weaker before we get to Thursday. I would suggest if you’re a EUR buyer to have orders staggered at different levels to take advantage this week

GBP/USD has settled into some range bound activity and we’re not seeing a sustained break higher. Do I think we’ll break 1.70? No, I think it is too big a resistance level to break and I expect some US Dollar strength to come into play that will outweigh any upside on Sterling. Friday will be interesting on the US Dollar front with both Non-Farm Payrolls released along with the Unemployment rate.

At these levels GBP/USD is looking attractive to purchase on Spot and also on a Forward Contract basis. Please contact our Head of Trading to discuss.

In addition, please contact us to have a full discussion on your strategy for the summer months.

Have a great week.

Written by Liam Alexander

27th May 2014 – ACM FX Report

The UK and US market holiday yesterday meant there was a subdued start to the week. Today, we have the ECB president, Mario Draghi, speaking and that may provide us with some volatility on the EUR. GBP/EUR posted 15 month highs last week and I expect the recent run to have another push to the upside. I think however we’re looking toppish and if you can cover off a large amount of your exposure at these levels you will be well placed for the rest of the year. As I’ve said numerous times before, anything above 1.20 is better than ‘fair value’ and if you can lock in above this level I don’t think you can go far wrong. You may want to consider a forward contract above 1.20 and guarantee yourself a fixed rate on a 3 month or 6 month basis. One less thing to worry about!Do you think there is potential for a sustained break higher? If so, place a market order at a specific level and we’ll implement that for you so that if it executes on the overnight Asian session you can take advantage of the market movements rather than be consigned to Spot on the London session. Please contact myself or one of the trading team to discuss implementing a strategy on GBP/EUR for the upcoming week/month ahead.

Apart from Draghi speaking this afternoon there is little other events of note on the calendar for today. Tomorrow all eyes are focused on Unemployment data out of Germany with the consensus being for an improvement on the Unemployment Change figure (May) from -25K to -15K with the unemployment rate set to remain unchanged at 6.7%. Should the Unemployment Change figure disappoint then we may see further EUR weakness meaning we may see a further push higher on GBP/EUR.

As always the main play and direction is through EUR/USD. With EUR/USD failing to break psychological resistance levels at 1.40 and dropping off I expect this downtrend to continue. As suggested at the beginning of Q1 I expect the US Dollar to be the strongest currency from the end of Q2 to the end of the year. I would anticipate EUR/USD coming off further with levels of 1.32 to be targeted in the next couple of months. I expect EUR/USD to fall with a mixture of EUR weakness and US Dollar strength short-term. We have US GDP (Q1) realised on Thursday that pretty much wraps up the week in terms of data. Estimates are for a fall from 0.1% to -0.2% however I expect the figure to come in better than expected than -0.2% so we should see some USD strength short term on the back of it.

GBP/USD is now settled into a nice trading range and with the weather being as gloomy as it is I don’t think it wants to come out and play much and would rather sit indoors and watch the news rather than participate in it. It can be easy to get blasé about the levels GBP/USD is at however one has to remember that Sterling has a history of falling off highs rather quickly. We could easily be at 1.60 in the next few months. On that note, as always, it is best to have a plan/strategy in place to limit your risk and cover off some of your exposure at these levels. Might it go 1.70 on Cable? Perhaps, however as suggested it may go 1.60 the figure first. Look to cover on Spot/Market orders/Forward Contracts/OCO’s in a way that best works for you. Please contact one of the Team here to discuss a strategy specific to your needs.

Have a great week

Written by Liam Alexander

12th May 2014 – ACM FX Report

GBP/USD hit 5 year highs last week however there wasn’t a sustained break to the upside and through the psychological level of 1.70. Resistance proved to be too great and we’re off around 1% or so from last week. Cable had a small bounce this morning after trading higher in the Asian session and we’re up around 40 pips or so from opening. Will GBP/USD have another crack at pushing higher? With data releases out this week there is a chance that it may indeed do so. Why? We have the release of Unemployment data and the Quarterly Inflation report on Wednesday that will give us a clear indication on the direction for cable. Will it be a push higher or a move lower that may open the door to a sustained break downwards through 1.65? The market is waiting to see if there are any hints from the BoE that tightening is likely. If inflation and growth forecasts are revised higher than investors and market participants may feel there is enough reason to warrant pushing Cable through 1.70.Today is a non-event in terms of data so I wouldn’t expect a great deal of volatility to get the week under way. Wednesday is the main day for Sterling so if you have a requirement this week to either Buy or Sell GBP against any currency I would look at having a strategy in place by close of business tomorrow. I would suggest utilising a market order to take advantage of any spikes on an intraday basis around the releases of 09.30am UK time and 10.30am. Please contact myself or one of the trading team to discuss implementing a market order to cover off some of your exposure.

GBP/EUR? After flirting with 1.22 for what seems like an eternity we seem to have achieved a foothold. Wednesday, as above, will determine if it is sustainable. Again, please contact me to place an order at an agreed level to execute. If you can secure above 1.21, and have the capacity to do so, I would look at securing a large percentage of your exposure at these levels. I know a number of you will now be asking the question “Is it going to 1.25 or even 1.30?” 1.25 I think is possible however that won’t occur till at least Q3. If you can cover off the remainder of your Q2 exposure on a Forward contract this may be a prudent thing to do. 1.30 I think will be challenging however I do believe that the EUR is massively overvalued so there may be an opportunity of this in Q4. As we all know however GBP/EUR has the canny knack of massively disappointing and going against all manner of perceived and conventional wisdom. We do have some key Eurozone data out this Thursday in the form of inflation data with the releases of CPI (YoY) (Apr) followed by GDP (QoQ) and (YoY) Q1 that will give us an idea of how the Eurozone is performing. I expect slightly worse than expected figures so there may be an opportunity to take advantage of this with a spike in GBP/EUR. Please contact myself or one of the trading team to work either a market order or an ‘OCO’.

EUR/USD? 1.40 was too much for EUR/USD and it has since dropped back below 1.38. That is still too high and I think Draghi is probably more comfortable with a slightly weaker EUR. I believe we’ll start to see a gradual weakening of the single currency through EUR/USD from now on and we should see EUR/USD start to target 1.35 to the downside with an end of year target of just over 1.30. Thursday afternoon may give the US Dollar a boost with the release of Inflation data from the US and also initial jobless claims.

The most interesting pair this week is GBP/EUR. Please give me a call to discuss this should have a requirement. We’re now at the highest levels since January 2013. If now isn’t a good time to purchase EUR then I’m not sure when is.

Have a great week

Written by Liam Alexander

6th May 2014 – ACM FX Report

EUR/USD is now at a 7 week high after better than expected Spanish data was released this morning giving EUR a shove higher. The momentum is now in EUR/USD to break the psychological level of 1.40. EUR/USD is trading on Dollar weakness than any firm bid tone on the EUR. We can see that through GBP/EUR which continues to climb and settle above 1.20 the figure on positive figures released out of the UK.I still feel, in spite of overwhelming evidence of late, that we’ll see USD have a correction this year and strengthen considerably. In the meantime however, GBP/USD is certainly benefiting from Sterling strength and also the continued Dollar weakness. If you have a USD buy exposure I would look at covering off as much of your exposure for the remainder of 2014 at these levels as you can. I would also look at placing a market order at 1.70 the figure to take advantage if we do break this psychological level on GBP/USD. There will be a lot of resistance at this level and a number of ‘stops’ that will need to be taken out to establish any kind of foothold above 1.70. There may be a sharp upside move once through 1.70, however I would then expect a retracement back below 1.70.

If you remember a number of years ago we did hit 1.70 however we then came all the way back down to around 1.35/1.40. I don’t think we’ll experience anywhere near that kind of fall back over the next few years however a drop back below 1.60 is certainly more than possible. Now, I do know a number of you will be reading this and thinking back to 2007 when GBP/USD hit 2.10 and will be asking the question “Can it get back to these kind of levels?.” Of course, conceivably it could however that is a long old hike back up to 2.10. I would look at covering off 50%, if not more, of the rest of your 2014 exposure on GBP/USD on a Spot and Forward Contract basis. Please contact myself or one of the trading team to discuss a GBP/USD strategy this week.

GBP/EUR? We’re still range bound with no clear push to the upside forthcoming. We’ve been as high as 1.22 in 2014 however we then, inevitably, traded to the downside. I think ‘Peaks and Troughs’ best describe GBP/EUR. We will require some very positive news out of the UK (perhaps the cancellation of X Factor/Big Brother/Britain’s Got Talent) to push GBP/EUR higher. If you can achieve 1.21 on GBP/EUR I think this is a good level to transact your EUR exposure at. To achieve a rate of 1.22 I think the best course of action is to place a market order at this level and if you have a couple of weeks to play with then leave the order in the market on a GTC (Good till Cancelled) basis.

What do we have out on the data front this week? Markit Services PMI (Apr) was released out of the UK this morning that came in better than consensus with a reading of 58.7 compared with analysts’ expectations of 57.6. We have various tier 2 data out tomorrow however the main day of the week and where we are likely to see increased volatility is Thursday. Out of the UK we have the BoE Interest rate decision released along with the BoE Asset Purchase Facility (May). I don’t expect any change in either. The key event however, and it has been for some time, is the ECB Monetary Policy Statement and press conference where Mario Draghi, ECB President, will speak. This, more than any other event of late, gives EUR/USD and in turn a broad section of other currency pairs such as GBP/EUR direction. Should you wish to place any market orders this week on EUR or USD crosses I would suggest placing these by tomorrow to give yourself the best chance of maximising any moves that day in your favour.

Please contact me to discuss any of the above and if you have any questions please do let us know.

Have a great week

Written by Liam Alexander

28th April 2014 – ACM FX Report

Last week was rather dull in FX markets with range trading prevalent. Indeed, the majors started trading roughly at the same opening levels of a week ago. This week should prove more interesting with increased volatility due to a number of key economic releases. I believe this will be the week where we’ll see the start of renewed US Dollar strength and a sustained change in direction on both EUR/USD and GBP/USD. Wednesday is a key day for the dollar along with Friday and the release of the NFP figure (Non-Farm payrolls). On Wednesday we have the Fed interest rate decision, monetary policy statement and an expected further reduction of 10 Billion in QE. This coupled with an expected fall in unemployment to 6.6% will provide us with dollar strength. The US Dollar, in my opinion, is undervalued at the moment and as stated at the beginning of the year I think Q2 onwards will see a change of direction. GBP/USD is looking very toppish to me and we’ve traded up at these levels previously and we did of course see a retracement back to the 1.63s. I would be extremely surprised if we hit 1.70 on Cable. If you have a GBP/USD exposure you could look at a 40/40/20 strategy. Look at 40% of your exposure on a Forward Contract basis to secure your rate at these elevated levels on a 3/6 month basis. 40% on a Spot basis and should you think there is still some upside on GBP/USD you could look at placing a market order at 1.69 or 1.70 on the remaining 20%. As suggested above, I don’t think we’ll hit 1.70 however ultimately it is your decision. Personally, I would suggest securing 50% on a Forward Contract basis and 40% on Spot and leave a remaining 10% on a market order basis. Please contact myself or one of the trading team to discuss.Sterling has proved robust this year with a relatively steady direction to the upside. It does however continue to run out of steam around 1.21-1.22 on GBP/EUR. I would look at placing market orders at 1.2150. With GDP (YoY) and MoM) (Q1) released tomorrow at 09.30am (UK time) we may see some volatility on the release that may give Sterling the impetus to push higher. The consensus is for figures of 3.2% and 0.9%. Contact myself or one of the trading team to implement a market order at 1.2150 today to try and secure this rate over the coming days.

Any positivity out of the UK may however be tempered by releases/news out of the Eurozone this week. We have CPI (YoY) and (MoM) (Apr) out of Germany tomorrow with retail sales and unemployment data following on Wednesday. Should the figures out of Germany be strong then we may see a further boost to the single currency. We also have CPI data out of the Eurozone as a whole on Wednesday that will give us a good indication as to where we are.

I expect GBP/USD to drop by around 1% this week so it may be wise to look at securing, should you have the capacity, Q2 or even further out into Q3 at these levels. As I have said many times before anything above 1.60 is still considered ‘fair value’.

On GBP/EUR I would look at securing on a Spot basis with a market order staggered at 1.2150.

Should you have any questions please do let me know.

Have a good week.

Written by Liam Alexander