SGM-FX insights

Quick to Retreat          A receding US Dollar once again yesterday was able to lift the outlook for FX. One significant outlier to that remained the Pound Sterling which, whilst still able to outperform an ailing Dollar, itself sunk lower. The main cause cited behind the underwhelming performance of GBP has been rising political risk. This […]

EU Household Income As envious eyes are cast from some in the UK towards the EU, it is worth noting that the EU average household income has increased by 7% between 2019 and 2024 i.e. since the pandemic. In case you are wondering, the UK has increased its household income by 9% over the same […]

UK Markets As widely expected, the Bank of England’s Monetary Policy Committee left interest rates unchanged. While of course closely watched by markets, the decision and subsequent Press Conference was overshadowed by the continuing political drama unfolding in nearby Westminster. With a 174-seat majority, it would have seemed unlikely or even inconceivable a few short […]

Bucking the trend The Aussie Dollar has broken out from recent ranges and is on a convincing upward trajectory. Post-Covid, the antipodean currencies, AUD and NZD, had found themselves a step ahead of the dominant global cycle shared between the likes of the UK, EU, and US economies. Over the past couple of years that […]

Gold and Silver Due to the vertiginous moves in both these precious metals all markets are more than usually fixated on the price action at present. Yesterday, both steadied and clawed back some of the recent losses with Gold rising almost 6% and Silver 10% to USD 4921, and USD 86.70 respectively at the time […]

Renminbi Reserves? The Dollar debasement debate hasn’t finished but should now take a breather whilst some stability has been restored to the currency. A combination of the nomination of Kevin Warsh, as we noted yesterday, as well as some robust US data are to thank for that recovery. To note here whilst on the subject, […]

British Pound With USD strengthening on the appointment of newly minted Fed Chair Kevin Warsh, it was inevitable that Sterling would suffer disproportionately, having been propelled upwards more by USD weakness than innate Pound power when the appointment was dully announced by a more than inarticulate POTUS. Having broken through GBP/USD 1.37 after seeing 1.39 […]

US Dollar If you are struggling to understand the US Administration’s Dollar policy, then you are far from being alone. Last week, POTUS when asked about the weakening US Dollar and whether it had declined too much replied that he thought it “Just great.” That prompted Treasury secretary Bessent to try to calm markets on […]

Secondary effects Despite the Federal Reserve decision last night offering momentary relief to the Dollar, a structural shift in USD remains underway. There were two themes to the Federal Reserve’s decision last night. Firstly, the Fed presented a decision to hold based upon the resilience that the US economy is showing. Secondly, Powell staged a […]

European Central Bank A remarkable interview from Central Bank of Lithuania Governor Gediminas Simkus yesterday, who is also a rate setter on the Board of the ECB for two reasons: the first is the frankness with which he spoke unlike those Delphic pronouncements from most of his predecessors which could be parsed in different ways; […]

A Dollar Vacuum If you’ve ever heard the phrase, ‘a rising tide lifts all boats’, you already know everything you need about today’s FX market. That is provided of course you’re not trying to analyse the rising tide itself, in this case our US Dollar. The Dollar is the counter currency to most key pairs […]

Japanese Yen By the time you read this, it is more than possible that the Bank of Japan in accord with the USA have jointly undertaken Yen intervention. The Yen strengthened sharply on Friday night as sentiment moved towards that happening. The level of USD/JPY 160 is seen as the level that will be defended. […]