The Scotland rugby result over Samoa was never in a moments doubt! Indeed, it was about as ridiculous as allowing Greece entry to the Eurozone in the first place. A discussion for another time.
After my musings in last weeks report we're up to around the 1.53 level as suggested. I think the shift higher in Cable is running out of steam again and we'll soon revert to another downtrend. The FOMC minutes released confirmed what we all know that a rate hike is out the window for 2015 so we can kiss goodbye to that until early 2016. There seems to be a raft of divided opinion within the Federal Reserve on whether the US is ready for higher interest rates. The Doves have it for now. However, and this may be completely wrong, although I have a small inkling not to discount the December meeting folks. I would think it unlikely anything will happen until 2016 although there may well be a winter surprise from Yellen.
USD buyer? I'd look at covering a percentage of your exposure off on a SPOT basis at current levels and look to the upside on data releases this week. I think the trend is lower although of course we'll have intraday spikes every now and then. We have the labour market report out of the UK and that should nudge GBP higher on its release. Contact myself or one of the trading team to implement a market order. Is 1.52/1.53 a great level to purchase Dollars at? Not particularly. However, it is a lot better than achieving 1.48. I think we'll have another go at the psychological support level of 1.50 before end of Q4 so please do speak with us to determine a strategy that works for you.
Conversely, if you are a USD seller I'd suggest staggering market orders to the downside at 50 pip intervals. Please contact myself or one of the trading team to discuss realistic levels to aim for over the upcoming sessions and throughout Q4.
Ah, my dear old friend GBP/EUR. Where do you fancy going this week? Up, down, sideways, sit on the couch and do nothing? The Single Currency seems to have returned from the beach refreshed heading into the winter season as we had EUR/USD post the highest weekly close since February. If EUR/USD breaks through 1.14 the figure then expect a test of the psychological level of 1.15 to be tested this month? If that happens then GBP/EUR will start to look south towards 1.30. How will that effect your bottom line? Does that need to be taken into account for pricing for next year? Please do get in touch with a member of the Aston team and we'll work through a tailored solution for you. In my view the EUR bulls are back in play and after a more dovish tone from the Bank of England minutes coupled with poor trade and construction data out of the UK Sterling is disappointing against the Euro. This week is all about inflation data out of the major economies and I expect a few key levels to be tested on the back of these releases. As always, please do make sure you have spoken with a member of Aston to have a strategy in place to mitigate your risk and take advantage of any upside.
If you have any questions please do let me know.
Have a great week.
Written by Liam Alexander