Daily Archives: May 2, 2012

1.23 on the Markets!!!

May 2, 2012   Euro, Predictions, Sterling strength, Sterling weakness

GBP/EUR levels have managed to push their way back above 1.23 during Tuesdays trading, halting yesterday’s suggestions that the euro was beginning its fight back. There was thought amongst some analysts that the recent highs sterling had been achieving were about to dwindle away and during Monday mornings trading this opinion looked to hold some weight. Levels briefly dipped below 1.22 but just as quickly fought back and by mid-afternoon  had surpassed the 1.2250 barrier. They pushed on again today and at time of writing were sitting at 1.2303, providing some of the best buying opportunities of the past two years.

In my opinion this is more proof that the Eurozone and its single currency still have a long rocky road ahead. The Spanish debt crisis could be compared to a sleeping beast and one that we can be sure European leaders are trying to keep sedated. There is a real fear that any Greece style bailout, if required, would cripple the EU, the current bailout fund and ultimately its individual economies.  The French presidential elections are also causing some concern amongst investors, who are worried about the consequences of current front runner Francois Hollande being appointed, due to his anti-Europe opinions.

For this reason I cannot see the euro pushing below 1.20 based on the current economic climate, both in the UK but more importantly in Europe. I also feel there will be resistance met at 1.24, as the markets wait for further information to decide which way they will move next.

If you have an upcoming currency requirement or would like to discuss current market trends then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.

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Sterling Euro hits 22 month high once again!

May 2, 2012   AUD, CAD, CHF, Economic data, Euro, NZD, Predictions, Sterling strength, Sterling weakness, USD

Following better than expected mortgage approval data and not too terrible PMI (Purchasing Managers Index) data we have seen Sterling have yet another gravity defying start in early morning trading.

The Pound is up against pretty much all majors, not by a huge amount but it is still up. Personally I feel that the sudden confidence in Sterling is due to it now being the best of a bad bunch…. Surely any investor with their head screwed on would be wary of the Euro at present and with the potential of QE3 hanging over the head of the Dollar the Pound surely steps forward… Even if we are technically in a recession at present.

The question really is how long will this last??? We have seen Sterling have a few decent spurts like this over the past few years, yet only ended up disappointed with it fizzling out thanks to poor negative movements from the Bank of England who seemingly get twitchy when the Pound gets too strong.

The sensible option in this market is to use a Stop Loss order… This is where you set yourself a worst case scenario in the market e.g 1.22 – If rates should start to drop[ away and that level become your trading level even for a second then your currency is automatically purchased for you, however the order (as long as it is not filled) can be moved at any time so if rates are creeping up you can always ‘chase the market’ up and keep increasing your bottom figure.

The good thing with this is that you know what your worst case scenario is for example the minimum your Euro purchase will cost, the bad part is if the market should jump down to the point your currency is bought and then fly back up again then you have secured your currency and the deal is done. For the less riskier client though this is ideal as you do get to see how the market pans out without losing too much if the market should drop away.

If you want more information on this then feel free to contact me directly djw@currencies.co.uk

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