SGM-FX insights

UK and the Bank of England   Inevitably, given that the market had collectively decided that a rate hike of 0.15% was a nailed on certainty, when the Monetary Policy Committee met yesterday and concluded that they would leave rates unchanged, GBP sold off sharply. Growth expectations for 2021 and 2022 were cut from 7.25% […]

Local Elections – South Africa   Domestic elections in South Africa have arrived amidst an already challenging time for the South African Rand. Having failed to hang on to gains associated with the liberalisation of travel and commerce following the latest wave of pandemic-induced restrictions, the Rand entered this week’s elections vulnerable to selling pressure. […]

US Dollar   As the US Federal Reserve got ready for the start of its 2 day policy meeting last night, expectations were for the announcement later this week for the start of tapering of the huge asset purchase scheme at the onset of Covid. This sent the USD a little firmer and the question […]

Aussie down a cent   The Reserve Bank of Australia (RBA) published its latest monetary policy decision overnight. The concept of buy the rumour sell the news is not new in markets. It refers to the idea of market forces driving up (or down) the price of an asset in anticipation of a future event. […]

USA and EU : steel and aluminium dispute resolution   All that rubber chicken over the G20 weekend has shown one positive outcome at least: peace has broken out in Rome and in future the USA will not apply duties and will allow EU steel and aluminium to be imported into the USA duty free […]

US Dollar   Yesterday saw the USD at a weaker level but not markedly so, on the back of Christine Lagarde, President of the European Central Bank making comments after the ECB monthly meeting. The market interpreted Mme Lagarde’s comments as insufficiently doveish- in other words because it was hardwired into the EU and the […]

Cheers to that?   Earlier in the week we highlighted the financial market’s positive yet muted reaction to the UK budget announcements made over the weekend. The lack of decisive reaction despite the salience of fiscal policy to exchange rates was put down to the risk of yesterday’s budget announcement striking a different tone to […]

GBP   Versus the low yielding currencies such as the EUR and Yen, GBP is at a 20 month high which is offering value to GBP sellers versus those currencies. Whether GBP goes higher from here is less certain as there is a suggestion that there is a lack of oxygen at these levels with […]

Chancellor’s Treat   There have been mixed reactions to Chancellor Rishi Sunak’s latest spending plans. Those reactions, of course, have been driven by each individual’s own stakes and thus rewards from the spending decisions made. The Chancellor even received condemnation from the Speaker of the House of Commons for swerving parliamentary procedure and declaring most […]

Saudi Arabia   Yesterday the Crown Prince kicked off the high stakes game of poker to establish Green credentials ahead of COP26 by pledging that Saudi Arabia will be carbon neutral by 2060. While there was a rush to welcome this news by COP26 luminaries, saner voices were heard to express doubt about KSA’s delivering […]

Batteries   Admittedly not a product that SGM-FX would normally cover, but one that is very much moving to the centre of our market radar screen. Thanks to a series of key patents, China dominates the production of iron based batteries making 95% of the world’s Lithium Iron Phosphate(LFP) batteries. Those patents expire soon and […]

The Paradox of Intervention   The US Dollar is on the rise. Of the 22 EURUSD trading sessions in September, 15 saw the US Dollar gain ground on the Euro. Overall, last month, the aggregate price move was approximately 2% in the favour of the greenback versus the Euro. In itself, the changing valuation of […]