GBP
Still in lockdown, still having to adhere to social distancing, slight bottle neck in the vaccination immunisation programme:
As you can see from the data above whilst we are way ahead of the curve with the total vaccinations administered, we are coming last in the fully vaccinated race. Will this have an impact on Boris’ roadmap? Lets hope not..
EUR & USD
GBPEUR very much stuck in a rut.
GBPUSD definitely on its way down – nonfarm payroll figures out this afternoon will certainly give us an indication as to how the Americans are holding up. Payrolls forecast is that 182,000 jobs were added in February, thus USD very much on a winning streak again now we are trading well below 1.40. If you are a buyer we suggest looking at placing some cover here. Get in contact…
Have a good weekend!
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Remaining on track following a relatively well received budget and a broadly stable global equity market. Without going into too much detail there was additional support of £65BN in 2021/22 from the government, equivalent to 3.1% of 2020’s GDP. Increased giveawyas include an extra £6BN in business rates relief and £5BN in grants.
Only slight pain to business owners is that corporate tax will rise to 25%, with companies who profits are on or under £50,000 will remain at 19%.
EUR
Retail sales figures out this morning. Massive indicator as to how the economy is doing since all the Brexit turmoil, expect some volatility today on GBPEUR if figures are any more or less than the consensus of -1.2 percent.
USD
Big 2 days of data and speeches ahead. Federal Reserve head (Jerome Powell) is talking this afternoon, with Non farm payroll figures out tomorrow. Again anything unexepected, GBPUSD will spike or dip accordingly.
Have a good day!
Picture taken during the morning drive to work
]]>GBP
First loss of the week against the majors in nearly two weeks – we can all breathe now and take stock! Normally when we see a slight retrace in the markets it is because the spending spree selling your GBP (both on Amazon and with 1FX) has petered off this week and thus a correctional dip has ensued. As per yesterdays blog, we believe that there isn’t much left on the upside, with far more downside risk should Boris wobble in anyway over the weekend.
EUR
However, strategists at Citibank retain a constructive stance on GBP/EUR.
“The Covid divergence narrative between the UK and Europe has been one reason behind recent GBP outperformance. While the narrative now looks increasingly priced in recent days after PM Johnson unveiled the national reopening plan, there could still be further room to run,”
Kurran Tailor, analyst at Citibank
Let’s see…your thoughts?
USD
This really is it for GBPUSD. We are now trading under the psychologival level of 1.40 and will probably close under it for the weekend.
Talking of which, have a good one!
Picture taken by Charlie Wilkinson, flying a G2 over the River Deben
(Any pictures you’d like featured next week with a shout out, please send over this weekend ? )
]]>So who banks with HSBC? Reports this morning from them suggesting…
GBP
“GBP’s reach exceeds its grasp” says Dominic Bunning, a strategist at HSBC, in a recent briefing on the currency. “In our view that upward momentum is undeserved from a value perspective. The move in GBP has far exceeded that of other anchors which one would normally associate with currency outperformance.”
At the time of writing this GBPEUR has rallied 4.0% in 2021, with GBPUSD going up 3.25%.
EUR & USD
We do feel that GBP is running out of steam against the majors and we’ve seen the majority of the spike.
If you’d like to discuss this further, please do not hesitate to get in contact.
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Lowest day of COVID infections yesterday at 8,489 and with 1 in 3 adults have now received a jab, things are looking up. However we must continue on the same trajectory and the current concern is that the vaccination availability has significantly reduced. Let’s hope everything remains on course for April 12th!
EUR & USD
Brexit fog has cleared and across the pond and they are all lining up to strike up a trade deal. GBP is now the clear flavour of the month against all the majors. The main fear now is that the USD latest retreat comes with spreading belief that the US will go farther than necessary to support the economy. How? With government spending and easy money policies, therefore ending up with too much inflation and too much additional debt, equalling USD weakness.
Any questions do not hesitate to get in contact.
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As alluded to yesterday our roadmap out of lockdown appears to be a positive one, which has cemented the gains we have witnessed over the past fortnight. In addition we believe that it would be nonsensical for the Bank of England to knock the economy off course with tighter policy, so don’t expected any interest rate cuts this year. Finally some good news to write in the updates!
That being said the stringency of lockdown regulations over the past year will have a material impact on businesses, particularly the significant number of small businesses that failed to receive sufficient support from the government during the pandemic. Fingers crossed our favourite pubs/restaurants still have the staff to turn the closed sign to open when the time is right…
EUR & USD
Highest level since March 2020 for GBPEUR and STILL 3 year highs for GBPUSD!!
For a more detailed conversation please do not hesitate to get in touch.
]]>GBP
So relatively quick and easy. If Boris keeps us locked up longer than we anticipate (beyond the end of April) then GBP will weaken. If the lockdown exit is positive and clear, then expect the positive rally to continue. Probably worth turning the news on tonight!
EUR & USD
Very much treading water at the moment. Biden has stipulated over the weekend that he is keen to cement a solid trading relationship with the UK, however we cannot see any positive strides being made until Q2. GBPUSD and GBPEUR are still holding out around 3 year highs…
Have a good Monday all.
]]>Keeping it brief and positive this morning.
GBPUSD
10 ticks off the elusive 1.40!! I reckon we will see it before close of business today – do get in contact if you wish to place a ‘firm order’ when the rate becomes tradeable.
GBPEUR
Up a collective 3.3% since the beginning of 2021, with half of those gains being recorded this week.
Reasons for the move:
- Positive technical momentum
- An ongoing post-Brexit realignment
- UK’s lead in the vaccine race
- Negative interest rates at the Bank of England now unlikely
- Broadly supportive global equity markets trends
- Potential buying of Sterling by global central banks
- It’s Friday
On that note have a good one! If you have any decent pictures you’d like featured in the morning update with a shoutout do get in touch.
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GBP & EUR
The slow vaccination roll-out overseas appears to have contributed to the sliding EUR rate with industrial volumes of EUR exchange touching 1.15 this morning. Higher levels are possible if our continued vaccination efforts continue at the same rate above.
USD
Continued exellent news if you’re a buyer of USD; 3 year highs!
GBPS gains rely of a combination of:
- Fading Brexit anxieties
- Fast vaccination rollout (as above)
- Fading expectations of an interest rate cut
On target for 1.40? We think so.
Please do also get in contact if you are a USD and EUR seller, there are ways we can help.
Have a smashing day.
]]>GBP & USD
A sharp pick up in GBP strength has held its gains over the evening with strong expectations that the UK economy will continue to bounce back. Industrial volumes of USD were being purchased over 1.39 yesterday, the first time in over 2 years. The additional gains means that GBP is the second-best performing major currency of 2021, with only the oil-fuelled Norweigain Krone outperforming.
BUT! Is this too much too soon and will the rally eventually hit the buffer? Putting Covid aside, many sceptics still believe our relationship with the EU is now built on sand, and we could find our new ‘Brexit rules’ under greater pressure as the year unfolds. Let’s hope the recent gains are “irreversible”, much like the next phase of Boris’ easing of restrictions.
EUR
Building on the above, support levels are now placed a 1.1320 with JP Morgan eying an upside target of 1.1534 in the coming week.
Have a good day!
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