Morning Update – Another day of strength

Morning all

Straight into it today..

GBP

GBP has bounced half a percent across all the majors yesterday, helped by comments from Britain’s Brexit secretary that a deal with the EU was still possible. Again, this could quite easily fall either way as an imminent agreement regarding the Brexit negotiations cannot be expected. Under that assumption, current levels provide ample opportunity for both sides of the market should you wish to hedge some of your GBP exposure.

EUR

Generally struggling in honesty despite ECB Draghi’s comments about “relatively vigorous” inflation in the previous session, whilst the USD paused before the US Federal Reserve’s policy meeting. The euro hit a 3.5 month high on Monday after Draghi expressed confidence in eurozone inflation and wage growth, but the gains were temporary. Still very much on the fence.

USD

USD is still rumbling away as the latest round of tariffs in the US-China trade conflict is keeping investors on edge and with an expected Federal Reserve rate rise, the third in 2019. However the market is not reacting (to the trade war) because we are not seeing any economic impact. The other big driver of the USD is monetary policy but that is and will be, a non-event. Putting all this aside the dollar remains the absolute go to currency when there is any question about risk or stability around any of these geopolitical situations.

Any questions do not hesitate to get in contact, have a good day

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