After ‘Black Monday’ last week where logical thought decided to take a summer stroll on the beach with an ice cream for a few hours we’re back to something approaching normality in the currency markets. EUR became the safe haven currency of choice after everyone piled into the single currency with the Chinese situation escalating and everyone dumping the dollar. Indeed, EUR/USD pushed through a number of resistance levels at the opening of the US session and we printed over 1.17 the figure briefly.

GBP/EUR

With investors pouring into the Euro last week we’ve had a change in direction on GBP/EUR. I’ll maintain my end of year forecast of 1.32 that I set in January. I don’t think we’ll be far off that. If you a Euro buyer I would consider locking in your requirement through a mixture of SPOT and Market orders. Yes, we’re not over 1.40 although in a few months’ time you may look back on securing over 1.35 as being very prudent indeed. As I’m sure you’re tired of hearing, doing nothing is speculating. Do you think the recent sell off is due a correction? If so, contact myself or one of the trading team and we can look at staggering market orders to the upside at appropriate and realistic levels.

GBP/USD

Sterling has been under pressure this morning after Manufacturing PMI came in below expectations. I expect a push back to 1.50 the figure on Cable before end of September then a dip further. If you are a USD buyer please do consider locking in some of your exposure above 1.50. Please contact me to discuss your specific requirements. If you think there may be some spikes on an intraday basis you can look to take advantage of these through utilising market orders. Please contact me or one of the trading team and we’ll work together to put a strategy in place over the next few months.

On the data front we’re light this week until Thursday and Friday. On Thursday we have the ECB interest rate decision and more importantly the monetary policy statement released. Expect volatility on EUR crosses. On Friday we have Eurozone GDP (QoQ (Q2) followed by the NFP (Non- Farm payroll) figure released out of the US Friday afternoon. If you have an exposure that needs to be converted this week please do have a strategy in place prior to Thursday.

If you have any questions please do let me know.

Have a great week

Written by Liam Alexander