Stumbling Block,
In a surprising day for markets, the Euro is the major mover. Markets paid enormous interest to the Italian budgetary negotiations within their newly formed domestic coalition. With the dominating ‘League’ party, the composition of spending was almost entirely up for grabs, with secessionist sentiment surrounding the entire debacle. However, with numerous promises from finance ministers and party leaders alike that the government will not exceed a 1.9% running deficit, markets were placated, affording fair value to the Euro. However, today, this has all been dragged into question with the publication and delivery of spending plans delayed without sufficient explanation. Markets are questioning why this has happened and, in so doing, have allowed the Euro to depreciate to lows of 1.1215 against the Pound and fall through 1.17 against an approaching Dollar. On a trade weighted basis, the Euro faces one of its worst intraday sell offs this year. The Pound has struggled to find footing once again as buy the rumour sell the news trading continues to create noise within all major currency crosses. The churning of the rumour mill today surrounded the UK fiscal budget and the potential actions of Chancellor Hammond in his premature 29th October budget. With potential Judge Kavanaugh facing testimony in Washington today, the Dollar remains bid, however, with considerable political risk all around.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Texas, USA The third largest citrus state in the USA after California and Florida is Texas. Currently the citrus crop is under threat in Texas due to chronic water shortages owing to a long running dispute with Mexico over delivery under a 1944 treaty whereby Mexico is supposed to deliver “1.75 million acre feet of […]
Parity As we brought to you earlier this week, there is an increasing chatter in the market about whether EURUSD has the momentum to challenge parity once again. At face value, of course, this would create a meaningful value change in the world’s foremost currency pair which has already seen a significant exodus of value […]
US Dollar Surging on a strong US economy together with further geopolitical tensions in the past week, USD is at its strongest versus EUR this year and came within a whisker of breaking through 1.06 in yesterday’s trading. Against the Japanese Yen USD was 154.55 which caused Japanese Finance Minister Shunichi Suzuki to break cover […]