Friday 20 December 2019
Soggy being the operative word this week in the UK as the rain continues to pour down and the Pound is following suit. Yesterday's BOE announcement provided a decent relief rally after they left rates on hold and the voting remained at 7-2 but it was all short-lived and down we came again.The UK government have this morning confirmed Andrew Bailey, currently head of the FCA, as the new BOE Governor from 16 March 2020 on the standard 8 year deal so a new era beckons. Today also sees MPs vote on the latest Withdrawal Agreement terms around 15.00GMT including the Dec 2020 cut off which adds to No-Deal fears, and which is expected to pass given the Tory's big majority.
Elsewhere the US House of Representatives have signed off on the USMCA trade deal but the US-China deal remains very much a work in progress. Lots of option expiries today in the mix also helping to keep ranges contained.
GBPUSD spiked to 1.3132 after the BOE decision but those 1.3130 sellers, including me, duly prevailed. I hope you took heed of my tweets at the time which also highlighted EURGBP demand at 0.8475.80. We've been down to test the strong support/demand at 1.3000 but that's proving a step too far and GDP data just out has provided a little more demand given the upward revision.
EURGBP remains underpinned but capped now by sellers at 0.8550 (GBPEUR support 1.1695-00) with GBPUSD also supported at 1.3000.B Don't forget month-end EUR demand looming too amid some thin Xmas liquidity.GBPJPY has held 142.00 as per my tweets but remains vulnerable.
I stay poised to sell GBP rallies while respecting the natural dip demand still given the rapid rise to test 1.3500 and we should continue to see some two-way business albeit with a softer bias now still.
EURUSD remains contained after dipping below 1.1120 again but holding 1.1100-60 overall.USDJPY is tightly bound again between 109.25-50 amid variable risk and USD sentiment. USDCHF sticking around 0.9800 after a test of 0.9780 as EURUSD bounces of its lows but EURCHF runs into more sellers.
AUDUSD has had a look at 0.6900 helped by softer USD tones while USDCAD also remains tightly bound amid variable oil price and USD sentiment.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always. Markets will get more scrappy as Xmas rapidly approaches
Tomorrow the slightly less soggy Shrimpers travel to Bolton for a key game against the only team below us propping up League 1 before we take on MK Dons, the team immediately above us, on Boxing Day. Crucial fixtures both.
Have a good day/week-end out there one and all.
Interbank rates: 08.35 GMT