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EURUSD - Current Price $1.07316 The USD continues to trade on the defensive this session after President Trump's inauguration speech raised concerns about potential protectionist trade policies. Eur/Usd which slid to an early low near $1.0680 has bounced back to clinch a daily high of $1.0755 ahead of pan-Eurozone consumer confidence and speeches from ECB President Draghi and Chief Economist Praet. From a technical view, we look for resistance around the $1.08 round figure mark fol…

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Cable is now down over 17.5% since the UK voted to leave the EU back in June and appears to have now stabilised below the 1.23 handle. Some say the currency was overvalued for years and its fall post-Brexit could serve as a release valve help loosen the stranglehold of the financial elites over the UK economy, which is just now just rebalancing as expected. Exports will, no doubt, ultimately be boosted by the weaker pound. It is pretty obvious that being the unrivalled fina…

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Volatility in the markets is very likely to continue and even increase in the coming months. This could provide many profitable opportunities to the savvy trader. Geo-political risk is moving to the forefront of investors’ minds at present and is guaranteed to be increasingly influential in decision making for the remainder of 2016. We have the imminent Brexit referendum taking place on 23rd June; since its announcement on 20th Feb we have seen high volatility in Cable with…

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And so it's begun......4 months of constant debate on whether or not the UK should stay or leave the EU. Even though the date has only been set now for less than a week, we have already seen a massive impact on the value of Sterling against all of it's major trading peers. There are very few opinions to suggest that this is not set to continue as the uncertainty builds towards the 23rd June 2016 day of destiny. This morning saw cable duck below the 1.39 handle, curr…

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The latest figures from the British Banking Association show that mortgage approvals reached a 24 month high in May. In the run up to the General Election April, the risk of an unknown coalition and a mansion tax slowed housing demand. Post-election, with a Conservative majority and interest rates still at 0.50%, buyers are back in force. May mortgage approvals edged up to 42,530 from 42,020 in April, the highest outturn since March 2014. The latest data supports the view of a reaccele…

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The Bank of England minutes for the MPC meeting ending on the 3June recorded that the committee voted unanimously (9 – 0) to leave interest rates unchanged at 0.50% and asset purchases (QE) at £375bn. Lower inflation is likely to dissipate, which is in line with previous comments from Mark Carney comments that the slowdown in inflation was transitory due to the sudden fall in energy prices. Any change from the MPC member voting from 9-0 would be seen as a signal that monetary pol…

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In April the ONS reading for CPI was that UK prices had gone down (deflation). In the height of the recession inflation peaked at over 5%, significantly above the Bank of England’s 2% target. The governor at the time, Mervyn King would write a letter to the Chancellor explaining why inflation was overshooting the central banks remit. With inflation high and asset prices appreciating, some analysts believed that interest rates would need to be increased from the record low of 0.50%. The…

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Traders are awaiting the US employment figures for May at 13:30pm London. The median expectation is for the headline Non-Farm Payrolls to be +225,000 jobs (+223,000 in April), and for unemployment rate to remain unchanged at 5.4%. The Fed has signalled wage growth and the tightening labour market to be the signal to tighten monetary policy. The market consensus is for a rate hike in September 2015, however Christine Lagarde (IMF) urged the Fed to hold off until 2016 before beginning to tight…

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The Markit / CIPS UK Services PMI missed analysts’ expectations; the reading was 56.5 in May compared with a strong figure of 59.6 in April. The release for May was the ninth consecutive month above 50.0, signifying expansion. The Services PMI figure followed Tuesday’s Manufacturing PMI release that also missed the analyst consensus. The Markit release highlighted that the outcome of the UK election had reduced business uncertainty. A key point that the market seems to have…

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In the FX markets Sterling (GBP) weakened against the other major currencies as the Markit / CIPS UK Manufacturing PMI missed expectations. The release from Markit showed manufacturing output had expanded in May, with the index at 52.0 compared to the revised April figure of 51.8. Manufacturing is only a small component of the overall UK GDP, with services being the major contributor to the economy. Following the release Sterling was offered against the US Dollar, trading to down below…

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On Tuesday indices in Europe and the US were weak after the long weekend, with the USD bid across the board, commodities were softer. During Wednesday morning’s session, the US dollar has pulled back from Tuesdays highs against the majors; EURUSD: 1.0920 GBPUSD: 1.5422 USDJPY: 123.00 The strong data from the US on Tuesday reminded traders that that the “data dependent rate hike” from the Fed, might not be as far off as had been expected. Openin…

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At the meeting the committee voted to leave interest rates and asset purchases (QE) unchanged at 0.50% and £375bn. Today’s release of the Minutes of MPC meeting 7 and 8 May 2015, were as analysts had expected that the members voted unanimously to stay unchanged. The headlines from the minutes were that two MPC members decision were “finely balanced” between unchanged and raising interest rates. The market impact from the minutes was minimal, the release was as the mar…

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The ONS will release their latest reading of UK inflation at 9:30am this morning, and there is a strong chance that the reading will be negative. The previous inflation reading was zero, in short prices measured on a basket of goods, were unchanged from the previous month. The Bank of England’s mandate is to target a 2% inflation rate; during the financial crisis this was consistently overshot peaking above 5%. The Governor, Mervyn King would write a letter to the Chancellor explaining…

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At 10pm on Thursday 7May the BBC exit polls were released, defying the opinion polls from before the election, predicting the Conservative Party would gain the majority of seats. Sterling rallied in the FX markets nearly 2 cents (1.5245 – 1.5447), as traders repositioned for the exit poll outcome. The expectation in the run up to the election had been for a coalition government, however the permutation’s of government varied, but a Conservative majority was a distant outlier.…

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The Bank of England released their inflation report following a self-imposed 6 week quiet period for the UK general election. The Bank revised their estimates for growth in 2015 from 2.9% 2.5% and 2.9% to 2.6% in 2016. At the same time the report highlighted their view that inflation was expected to rise notably, once the short-lived factors such as fall in crude price dissipate. The base interest rate has been at 0.50% for the last 6 year, with inflation for multiple years overshootin…

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