SGM-FX insights

Expensive Furniture At the time of writing at least, ANC leader and South African President Cyril Ramaphosa has managed to hang onto power. When the President found himself at the centre of a South African political scandal, there was a lot of concern and risk surrounding the nation and its assets. International attention was cast […]

Australia With the Reserve Bank of Australia (RBA) raising AUD interest rates to 3.1% which is a 10 year high, it has thrown the GBP/AUD rate back into the spotlight. Trading lower at AUD1.8185, nevertheless GBP remains at its highest level since March 2022 and still represents value-the range has been pretty much 1.80-1.90 for […]

Great British Pound GBP has notched up the sharpest recovery for some years and on Friday night was trading at GBP/USD 1.2285 and GBP/EUR 1.1655. Quite a turn around. Before continuing however, it is worth reminding ourselves that in times of such volatility, it is rare for a currency to continue in a straight line […]

Germany Despite the ECB (European Central Bank) releasing a more optimistic outlook for inflation this week, careful Germans unlike their more profligate Southern European neighbours are spending less as they come to terms with much higher energy bills and much more expensive food costs. The Germans are also more worried about their personal finances than […]

Data incoming It looks like Christmas has come far too early for equities. Led by exchanges primarily in the United States, it appears Santa, in the form of Jay Powell, has been spotted heading down the chimney. It is only December 1st after all so I will stop the parallels between Santa Claus and Federal […]

European Central Bank Earlier in the week we wrote about apparently conflicting views from ECB Board members on the path of EUR interest rates, but yesterday the ECB President Mme Lagarde contradicted both her Chief Economist and also her Deputy Luis de Guindos when she gave her own view. In short Mme Lagarde does not […]

Nominal incentive, real problem The difference between real and nominal data has often been the explainer behind why things in the market are not always what they seem. In different circumstances markets may focus upon nominal or real data. Even within the same asset class, even currency, on two different events you can often isolate […]

UK Employment Fresh on the heels of the shockingly high net UK migration of 504,000 released at the end of last week comes another statistic that will pile pressure on the UK government. The much trumpeted UK unemployment rate of sub 4% or approximately 1.4 million has been unmasked as more than somewhat misleading: the […]

Federal Reserve: reading the tea leaves  Positively, the market has taken cheer from the most recent Minutes of the FOMC which sets US interest rates. Because the Minutes reflect that the expectation that the pace of interest rate rises is due to decrease early next year, the market has collectively not looked at the other […]

Overnight, minutes from the latest Federal Reserve Bank’s Open Market Committee meeting were released. If you recall, the latest decision taken earlier this month produced a bumper 75 basis-point hike in US interest rates. However, the meeting was critical not only for the outcome of the decision but for any forward guidance that might come […]

Yield Curve Control One of our most distinguished and long running customers has raised the question of Japan’s YCC or Yield Curve Control policy and how long Japan can continue to maintain its dovish interest rate approach (-0.10% since 2016) when the rest of the world and particularly the US Federal Reserve is raising interest […]

Housing and FX If asked you might not place the housing market as a key determinant of the value of a currency. Whilst it may not and should not take the top spot in any currency valuation model, vulnerability and instability in a domestic housing market can have a serious impact upon a currency. This […]