While the euro has been beating up on the US dollar recently, the British pound has not seen fit to join in. Rather than rallying, the pound sterling has been hit by a variety of crises, including the weak global equities market and the US housing problems. The resurgence of Foot and Mouth disease in [...]
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Carry Trades Unwind on Risk-Aversion
Yesterday’s report on the extremely sluggish U.S. housing market sent equities markets crashing, investors dumping corporate debt, and currency traders unwinding carry trades. New U.S. homes sales for June fell 6.6 percent. This number has jumped significantly from the 2.2 percent decrease in May. According to a Bloomberg article, this may be a no end [...]
Is the Pound the New Dollar?
In the London market last night, EUR/USD underwent the correction that we had predicted yesterday. The euro fell amid concerns that the forex market was overextended. But there’s another currency that has performed even better against the US dollar: the British pound. GBP/USD seems to reach new multi-decade highs every day. The early momentum in [...]
Inflation the Big Concern and Britain Leads the Way
With oil prices still hovering around $70/bbl (and with a realistic possibility of $80 oil), world prices are not likely to go down anything soon. Both headline and core inflation are on their way up, and that makes inflation more of a concern for central bankers than growth. What that means for forex traders is [...]
Great Britain Pound Hits Fresh Highs
The pound reached a new 26-year high against the dollar last night. Still short of the important 2.0200 level, the gain was still impressive and primarily fueled by speculation on interest rates. Among the major forex countries, there are a number of central banks having their meetings this week, but the Bank of England is [...]
Bank of England Rate Hike Likely
The most important news today (at least in terms of the foreign exchange market) is the release of the minutes of last month’s BoE Monetary Policy Committee meeting. The release surprised most of the market with a more hawkish-than-expected stance. The Committee did vote to keep interest rates steady in June, but the vote was [...]
Follow the Yield
The defining action this weekend had traders basing their decisions almost entirely on yield differentials between countries. In many cases, broad economic data was ignored in favor or inflation expectations and interest rates. That’s why it is so important for foreign exchange traders to study the futures charts and determine which central banks the market [...]
Bank of Japan Holding Rates
As mentioned last week, the GBP/JPY did in fact make the 100 pip gain. Not only that, but this week it will close where no week has closed since late 1992, passing the highest weekly close of 1998. This is greatly due to the surprise move of the Bank of Japan to keep interest rates [...]
British Pound Sterling Hits 30 Year Trend Line Against the Dollar
On a monthly chart the GBP/USD hits a rarely touched thirty year trend line.
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