• Pound underpinned by Conservative victory but FX jury still out

    It was always going to be a night of unknowns but we know now that the Conservative Party have a large working majority for the first time in many years. Does that make Brexit on 31 January a definite? It may do (still not certain) but that's not the end of the process, merely the start. Since my last update we've seen the Pound retreat a little further but remains underpinned for the moment as we wait to see how much of this result has been factored in.

    Elsewhere Trump has been making positive noises on the US-China trade talks (China hasn't though) while still embroiled in impeachment proceedings in what has been a quite remarkable year around the globe.

    GBPUSD has fallen through 1.3400 as I type but will continues to be underpinned with gaps to be filled after last night's sharp spike. Those large expiries later today at 1.3250(1.4bln), 1.3295-00 (1bln) 1.3400(1.2bln)and 1.3450(Gbp1.25bln) are potentially all in play too. EURGBP is rallying as GBPUSD falls and now posting 0.8350 (GBPEUR down to 1.2000 from those 1.2088 highs). GBPJPY has fallen back through 147.00 after the 148.01 highs.

    I continue to have concerns as to how all this plays out for the UK, both economically and politically, and I stay poised sell GBP rallies while respecting the current relief demand still. I repeat that this is the end of nothing but the start of fresh unknowns.

    EURUSD has tested 1.1200 helped by some EURJPY demand tempering the EURGBP sell-off but currently back down at 1.1170. More expiry interest in play today at 1.1120-25(EUR 1.3bln) and 1.1150-70(1.9bln) to help contain the range. USDJPY has been up to 109.66 as risk sentiment remains slightly positive. USDCHF has fallen back again though to post 0.9804 as EURUSD rallies and remains underpinned with EURCHF finding sellers above 1.1000.

    AUDUSD has made more gains in the last the 24 hours amid AUDJPY demand on the better risk sentiment and A$1.3bln in expiries today between 0.6885-00 all having a say. USDCAD has retreated again from 1.3200 but holding at 1.3150.

    Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

    Tomorrow sees the soggy Shrimpers back at the hallowed Hall and after this week's Election/FX market fun and games I'll gladly take whatever they throw at me!

    Have a good day/weekend out there one and all.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.30 GMT

    GBPUSD 1.3407

    EURUSD 1.1178

    EURGBP 0.8328

    GBPEUR 1.2005

    GBPAUD 1.9378

    GBPCAD 1.7660

    GBPJPY 147.06

    GBPZAR 19.2978

    GBPHKD 10.3944

    USDJPY 109.61

    USDZAR 14.3863

    EURJPY 122.49

    EURCHF 1.0983

    EURHKD 8.6584

    AUDUSD 0.6924

    USDCAD 1.3161

    USDCHF 0.9827

    Read more...

    0 comments

  • Wet weather and tactical voting could shape the Election outcome in a night of unknowns.

    As promised in my morning update here's a few thoughts on today's UK General Election possible outcomes.

    Firstly I'll note as per my earlier tweet that it's an awful weather day here as it was for the last election in June 2017 and that can affect the voting with those more motivated likely to make the effort to get to the polling stations. If anything the risk on that will be against the Tories with many of their voters feeling complacent and seeing little need to brave the weather elements. In reality though this election is potentially the most important for decades and voters will have Brexit preferences way above party politics and that will convince many to get out there regardless of getting soaked!

    Despite showing a lead in the polls and majority of 21 in 2017 the Conservative Party made a net loss of 13 seats with 42.4% of the vote (its highest share of the vote since 1983), and Labour made a net gain of 30 seats with 40.0% (its highest vote share since 2001 and the first time the party had gained seats since 1997). It was the closest result between the two major parties since February 1974, and their highest combined vote share since 1970.

    Today we go into the count with the last YouGov poll showing the Tories with a majority of 28 seats from the 650 being contested.Some forecasters are predicting less with a hung parliament still in the mix, a scenario that would see Labour forming a minority government. Others are predicting more than 28, including an esteemed colleague with whom I was out to dinner last night and who made me a price of 43-46. I gave (sold) him at 43 of course. Rude not to!

    There will be lots of tactical voting today with many marginal seats being targeted mainly in a bid to oust the Tories but it could also work the other way. It is indeed a night of many unknowns ahead and we can't comfortably rule out a host of different outcomes including the Liberal Democrats doing well on their Remain ticket.

    So what might we see in the FX market? Well, the first real reaction will be to the exit poll published at 22.00 GMT. A solid Tory majority will see GBP spike higher on a relief rally. From current levels of 1.3150 we could see GBPUSD post 1.3300-1.3400, maybe more but be aware of large expiries lurking (see below) if that poll outcome is backed up over the following 3-4 hours by early results. Equally if the poll shows anything less than the general Tory majority expectations we will see a slide which could snowball if significantly lower or showing them losing power completely.First results are expected between 23.00 and 00.00 GMT and will continue being announced throughout the night. Click here for a useful guide to result times https://www.mirror.co.uk/news/politics/what-time-know-results-general-21017488). Sunderland, due at 00.00 GMT, could be a real significant moment as it was in the Brexit referendum and will be closely watched.

    The degree of GBP fall will be in direct relation to the perceived and actual outcome so it will be less for a reduced majority, say 1.3000 if still around 1.3150 at the time, but more if it shows the Tories in real trouble.In which case we can't rule out 1.2800-1.2900 initially and maybe more.

    Remember that liquidity will be ultra thin at this time and we could see some significant moves and reversals way beyond the realms of common sense. Talking of which it's important to recognize that as long as the Tories get a working majority then any additional increase in the size of that has limited positive impact. The algos and investors will just be pleased to have avoided any major upsets. It doesn't really matter whether the have a majority of 40 or 140, just as long as its enough to get its policies through so beware of over-reaction.

    Therefore, and really trying hard not to sound myopic, I believe the risk to be to the downside. We've seen a solid rally in recent weeks and I would say the market is a little overbought in the near term. Remember that the rally was preceded by a concerted move lower so we should be relatively well balanced. While all eyes are on the election result the UK is still in a period of great stress and uncertainty with Brexit unlikely to be delivered any time soon if at all even if Johnson does prevail. The economy is showing real signs of fatigue and that can't all be blamed on Brexit unknowns. On the extreme outcome that Corbyn was to triumph tonight then you can kiss the Pound good-bye.

    My strategy will be to look for over-reactions to the topside on a solid Tory performance and sell into it and be ready to sell on any Corbyn-positive/bad news from the off. It really is too close to call and there are far too many unknowns to make any definitive calls on levels at this time. There's simply no point second-guessing and it has never been part of my trading armoury anyhow. I will be tweeting my immediate thoughts and levels to enter/exit from the off and hopefully will find time during the night to mail you an update too. If there are any questions you have meanwhile then please feel free to email me.

    Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

    Don't forget too that I offer 1-2-1 mentoring if there's areas of trading that you might need some further help with,or how to make best use of the order boards and option expiries.

    I wish you positive pips if you're going to be trading Pound pairs through the election fall out. Be prepared for a very bumpy ride though and remember, let's be careful out there.......

    Twitter: @MSPFX and @MikePatersonFX

    Read more...

    0 comments

  • Move over FOMC. Bring on the ECB and UK General Election

    The week's focus was always going to be about today's UK General Election but last night saw the FOMC keep rates on hold as expected with some dovish/cautious outlook again that brought some USD supply. Now UK voters

    are heading to the polling booths with exit polls due at 22.00 GMT but meanwhile we have the latest ECB decision and the first with Lagarde at the helm.

    GBPUSD has posted fresh highs of 1.3230 before retreating but continues to be underpinned with Tory majority expectations still to the positive side. More expiries today at 1.3150 (GBP500m) and 1.3200 (1.1bln)in play until 15.00 GMT. EURGBP remains tightly bound with core pairs both rallying post-FOMC but GBPJPY has bounced from 142.50 to post 143.65 again and remains underpinned.

    I continue to stay poised and sell when upside momentum fades but respecting the current demand still. All focus on today's election outcome and I will email you some more thoughts/scenarios for that later today with updated order boards. I also plan to be at my desk as the first results come through.

    EURUSD has broken up through 1.1100-10 and should help cap rallies. More expiry interest in play today at 1.1090-00(EUR 2.2bln), 1.1120-25(1bln), 1.1140-50(950mln). I will mail some post-ECB thoughts but I'm not expecting any change in policy although we could see some volatility in the presser as Lagarde makes her debut.

    USDJPY is holding around 108.50 still with limited fallout post-FOMC as risk sentiment remains slightly positive but still not rallying too far. USDCHF has fallen further post-FOMC as EURUSD rallies and EURCHF still finding a few sellers.The SNB being ever vigilant albeit not seemingly in a rush to stem the CHF demand for the moment. This morning's SNB decision saw rates, policy and rhetoric all unchanged as expected.

    AUDUSD has made decent gains in the last the 24 hours amid softer USD, better risk sentiment and 1.3bln in expiries tomorrow between 0.6885-00 all having a say. USDCAD has retreated to test 1.3150 on the post-FOMC USD supply/firm oil double whammy.

    Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

    Have a good day out there one and all.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.30 GMT

    GBPUSD 1.3205

    EURUSD 1.1137

    EURGBP 0.8431

    GBPEUR 1.1862

    GBPAUD 1.9188

    GBPCAD 1.7391

    GBPJPY 143.49

    GBPZAR 19.3459

    GBPHKD 10.2378

    USDJPY 108.63

    USDZAR 14.6477

    EURJPY 120.96

    EURCHF 1.0927

    EURHKD 8.6308

    AUDUSD 0.6883

    USDCAD 1.3167

    USDCHF 0.9813

    Read more...

    0 comments

  • Pound wobbles as General Election looms ever closer. FOMC in focus too.

    Last night saw a rapid retreat on GBP pairs as an election poll showed the Tory lead falling and highlighting the uncertainty around tomorrow's General Election outcome but equally has found some dip demand and rebounding as I type. More certain seems to be the outcome of the US Federal Reserve meeting tonight which is widely touted to keep rates on hold but as always markets will be looking for clues on future policy.

    GBPUSD posted fresh highs of 1.3215 yesterday before the rapid fall to test 1.3100 support and currently back to 1.3150. More expiries today at 1.3150-60 (GBP700m) and 1.3185-05 (950m) to contain range.EURGBP has also been on a roller coaster ride accordingly and tested 0.8460 again from 0.8400 before retreating to the pivotal 0.8430 area. GBPJPY has had its own round trip down to test 142.50 from 143.65 before bouncing and now testing 143.00.

    Rally-selling GBP remains my preferred strategy overall and worked again last night, but, as I've been warning for a while, I respect that some others (and the algos) see it differently at the moment. Remember we're ranging still so don't get too greedy whatever your bias. I continue to stay poised and sell when upside momentum fades but respecting the current demand still. All focus on tomorrow's election outcome and I will email you some more thoughts/scenarios for that.

    EURUSD is tightly bound still with more expiries in play again today, mostly around 1.1100-10 and should help cap rallies.USDJPY is holding 108.50 but still not racing anywhere in a hurry for the moment. USDCHF continues to find some dip demand but on the back foot as EURUSD remains tightly bound but EURCHF finding a few sellers again.

    AUDUSD has held 0.6800 again but equally finding sellers above 0.6830. USDCAD also tightly bound between 1.3220-50.

    Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

    Have a good day out there one and all.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.45 GMT

    GBPUSD 1.3143

    EURUSD 1.1084

    EURGBP 0.8433

    GBPEUR 1.1859

    GBPAUD 1.9254

    GBPCAD 1.7400

    GBPJPY 142.90

    GBPZAR 19.4205

    GBPHKD 10.1913

    USDJPY 108.69

    USDZAR 14.7822

    EURJPY 120.48

    EURCHF 1.0914

    EURHKD 8.5937

    AUDUSD 0.6827

    USDCAD 1.3235

    USDCHF 0.9845

    Read more...

    0 comments

  • More of the same as FOMC meeting approaches

    Yes folks, FX pairs still tightly bound with attention shifting now to tomorrow's US Federal Reserve FOMC latest decision on interest rates/monetary policy with US-China and UK General Election headlines still in the mix too. Risk sentiment therefore remains variable.

    GBPUSD remains underpinned still amid some general USD softness but not yet breaking up through yesterday's fresh 7-month highs and contained by GBP 650m in expiries at 1.3150 today. EURGBP is tightly bound still as core pairs rally/retreat in tandem.GBPJPY continues to go nowhere in a hurry with core pairs and sentiment both stable.

    Rally-selling GBP remains my preferred strategy overall but, as I've been warning for a while, I respect that some others (and the algos) see it differently at the moment. Remember we're ranging still so don't get too greedy whatever your bias. I continue to stay poised and sell when upside momentum fades but respecting the current demand still.

    EURUSD is holding above 1.1050 but capped into 1.1100 with more expiries in play again today while USDJPY is holding 108.50 but still not racing anywhere in a hurry for the moment with large expiry interest between 108.60-70 (USD1.65bln) and 109.00(2.55bln) today. USDCHF continues to find dip demand helped by the EURUSD and EURCHF still ranging.

    AUDUSD has found itself tightly bound still amid the variable risk and USD sentiment but retreating to test 0.6800 again while USDCAD had a retreat/down to 1.3220 but on the rise again this morning.

    Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.Don't forget too that I offer 1-2-1 mentoring if there's areas of trading these tight ranges, or how to make best use of the order boards and expiries, that you might need some further help with. I will help develop your powers of trading discipline and psychology all learned in my 38 years in FX, including 20 as a market maker.

    Have a good day out there one and all.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.30 GMT

    GBPUSD 1.3142

    EURUSD 1.1073

    EURGBP 0.8425

    GBPEUR 1.1868

    GBPAUD 1.9262

    GBPCAD 1.7394

    GBPJPY 142.82

    GBPZAR 19.2905

    GBPHKD 10.1889

    USDJPY 108.63

    USDZAR 14.6700

    EURJPY 120.32

    EURCHF 1.0928

    EURHKD 8.5853

    AUDUSD 0.6824

    USDCAD 1.3230

    USDCHF 0.9867

    Read more...

    0 comments

social_rss_box_orange
official partner advert

Proud supporter of

tel
emailsymbol

Call us today: +44 (0) 1732 700 383

Email : info@mspfx.co.uk

Bringing You The Best Value Currency Deals

Raising the Standard in Foreign Currency Exchange & International Money Transfers

Office hours : Monday to Friday - 8am till 6pm

The MSP Update

Photo crop (passport)

Welcome to my blog

Daily market commentary from
Mike Paterson

The MSP Update is an essential tool for personal and business clients who want to be kept informed on a daily basis. If you would like to discuss your requirements then give us a call and talk to one our experienced team..

Call today +44 (0) 1732 700 383

Find out how much you could save today

Don’t let the banks or your existing foreign currency broker cash in with poor exchange rates and extortionate fees, Whether you are making a small or large, one-off or regular money transfer , MSP FX will offer the best rates for your individual foreign currency requirements and assist you in transacting at the most opportune moment possible given your timeframe. MSP Foreign Exchange Services offers complete security of funds by executing trades only through preferred FSA and HMRC regulated providers. For more information call us today and find out how MSP FX can help you.

Euros-1024x683
003-paradise-island-x

You are viewing the text version of this site.

To view the full version please install the Adobe Flash Player and ensure your web browser has JavaScript enabled.

Need help? check the requirements page.


Get Flash Player