GBP/EUR back on the march to 1.20? We’ve printed 1.1843 in recent trade so it’s been quite a turnaround from a couple of days ago when we were under 1.17. What should you do on GBP/EUR? Sit and wait and hope we hit 1.20 again? I’d suggest that would be about as wise as the affair Rebecca Brooks and Andy Coulson had. If you’re a buyer of EUR from GBP I would look to place orders in the market at different levels and ‘average up’ your rate. For example, I would look at placing a market order at 1.1850 for 50% of your exposure then look at 1.1875/1.19/1.1950 and finally 1.20.We have seen GBP/EUR attempt to break through 1.20 on numerous occasions as it’s such a psychological level however it never hangs around there too long. If we do hit it, and it is a big ‘if’ you will have covered off at pretty much the high of the market for the rest of 2013 I would argue. I don’t see much more in it. 1.1850? I would look to cover off a significant amount at this level. Contact myself or one of the trading team to discuss implementing these orders. It is a ‘EUR’ holiday today so we may see less volatility today on EUR crosses however our trusty friend Sterling never fails to disappoint with some erratic behaviour from time to time. Seller of EUR back to GBP? I would work an order at the 1.18 level over the next week or so. The EUR has weakened off significantly over the last 24 hours due to the disappoint unemployment and CPI figures released yesterday. However, with the EUR showing resilience levels over the past couple of years akin to those of a football fan supporting his struggling local team suffice to say the EUR could strengthen again short term. If selling EUR I would look for dips in the market at 1.18 and try and take advantage of these on an intraday basis. Contact our trading team to place sell orders in the market.
GBP/USD? The downwards EUR/USD move due to yesterday’s poor data moved GBP/EUR upwards and has dragged ‘cable’ down back below 1.60. For those readers that aren’t too sure of what ‘cable’ is it is simply the term used for GBP/USD. Why is it called Cable? In the 19th Century GBP/USD rates were transmitted through the transatlantic cable between London and New York hence the term ‘cable’. A history lesson on a Friday morning as well as a discussion on Foreign Exchange. You really are spoiled. Anyway, back to GBP/USD. Are we now due for a further retracement and to settle into levels in the lower 1.59s? That is largely dependent on next week as there is little data out today. We’ll trade in a range today of around 50 pips either side of 1.60 at a push. I think the recent moves have been significant enough for market participants to sit back and re-evaluate for the month ahead.
If you didn’t secure a significant amount of your exposure above 1.60 please do look at orders at 1.60 the figure again and lock in at this rate. You’ll give yourself one less headache to contend with. Seller of Cable? Put orders in at 1.5975/1.5950 as I don’t see any huge shifts in the market today.
Here is a ‘Did you know’. On 1st November 1993 the Maastricht treaty came into effect formally establishing the European Union. Some knowledge for a pub quiz at least.
If you have any Foreign Exchange questions please do let myself or one of the trading team know.
Have a fantastic weekend and enjoy the fireworks displays.
Written by Liam Alexander.