For all those affected by this currency pair the tendency is to focus on GBP and its changing daily/hourly strength or weakness due to the torrid action in Westminster. As perceptions that a NoDeal is out of the picture, GBP strengthens and then as news emerges that PM May and Leader of the Opposition Corbyn find no common ground other than their well recorded mutual antipathy, GBP weakens. Volatility in a narrow range as reported here last week. Outside in the wider world USD currency traders, Chicago Mercantile Exchange Futures traders and the market community that tracks the EUR see no reason to buy the EUR at present: Germany economic releases reflect a weak and a further weakening position; Eurozone growth is flat; French unemployment is high and not shifting downwards etc etc etc. Net short EUR trades on the Chicago Mercantile Exchange increased last week by $2.6billion and now total EUR positions stand at $13.9 billion short. While this is a small part of the $5 trillion per day global foreign exchange market, it is nevertheless representative of overall market sentiment: there is no good reason to buy EUR at the moment. In summary that means that despite the Brexit negotiations’ negativity of Westminster and Brussels, GBP is insulated from much larger dips by the ongoing greater negativity for EUR…..for the moment.
Brown Shoes in The City of London: Brown in Town.
Hard on the heels of the news that Goldman Sachs no longer requires Masters of the Universe and in fact all staff to wear suits, comes the news that a City Law firm partner told the audience to avoid brown shoes with a blue suit. Quite takes me back in time to 1992 when one of my colleagues had rashly cut a dash by wearing a tie, blazer, dark grey trousers and brown shoes for the morning Executive Directors’ Meeting. Looking him up and down my then Investment Bank CEO with a raised eyebrow, said: “ Good of you to come in while you are on holiday.”
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Japan
Humphrey Percy
Fri 8 Dec 2023
Japan Some of the market’s Great Minds spent yesterday afternoon debating whether Japan could get away with raising interest rates at the same time as the Central Banks from the other major markets are starting to cut their interest rates. In short, Japan can and probably will, since its monetary policy has been effectively in […]
Morning Brief – Rather you than me, Christine
Charles Porter
Thu 7 Dec 2023
Rather you than me, Christine As we and the market alike have been speaking about recently, Eurozone rates are all the rage. As we highlighted yesterday, the path for rate cuts next year has already captivated the market with easing being forecasted as early as Q1 2024. As we approach the Christmas period, we must […]
Morning Brief – European Interest Rates
Humphrey Percy
Wed 6 Dec 2023
European Interest Rates More momentum on rate cuts in the Eurozone as expectations grew for cuts starting in March and totalling 140bps in 2024. Equally in the UK cuts of 130bps starting in June are being pencilled in to market calendars. What this means is that GBP/EUR is looking more than especially good value at […]
