Friday 6 May 2022
Per my forecast yesterday, and subsequent update the BOE hiked bank rate by 0.25% with economic forecasts very soft, a 6-3 vote and gilt sales on hold until later in the year. That alone disappointed the hawks but it was the press conference that did the real damage as Bailey & Co appeared totally clueless and proceeded to paint a very dismal picture. No surprise there to me, or my readers hopefully, but for some it was a reality check and the Pound tumbled. I hope you all made some pips.
Early results in this morning from the UK's local elections show Boris Johnson's ruling Conservative Party have lost control of traditional strongholds in London and suffered losses elsewhere but no great surprise as these invariably end up a protest vote and let's face it, the UK population have a lot to protest about right now.
Equities are a little softer, as is Gold, while oil has found some more dip demand. US bond yields continue to rise and underpinning the Greenback. Plenty more chatter from the ECB on hiking rates helping to support the Euro too.
GBPUSD: No surprises in the wake of an ultra-dovish/clueless BOE despite a 0.25% rate hike. Steady retreat all day and finally stopped at 1.2276, for the moment at least. Small rally as I type but I remain poised to sell rallies as ever.
EURGBP: A break of 0.8460 as GBPUSD weakened post-BOE and a solid rally to post highs of 0.8565 as I type. Some options impact in play today.GBPJPY: One-way traffic post-BOE but a hold around 160.50 this morning as core pairs find some dip demand. Sellers will remain poised.
EURUSD: A strong rally this morning after holding 1.0480-00 yet again but capping at 1.0580 so far but with good dip demand on the crosses too.USDJPY: Good two-way pips still but finding a base now at 130.00. EURJPY: Support at 137.00 now till as the Euro finds general dip demand as does USDJPY but 138.00 cap so far.USDCHF: Support now at 0.9780-00 per recent trend amid generally firmer USD tones and with EURCHF finding more dip demand with the SNB never far away. EURCHF: A good hold of 1.0330-50 this time with the SNB lurking in the dips but more rally sellers poised into 1.0400.20
AUDUSD: Another solid retreat after that failure at 0.7200 and now a test of 0.7050-60. Some option interest today in play. GBPAUD down to 1.7200 as GBP tumbled but tempered by AUDUSD retreat too and now back to test 1.7420. NZDUSD holding 0.6400 in the latest retreat but capping at 0.6440 in rallies. GBPNZD stuck between 1.9200-9300 after finding a base below 1.9100 with sellers above 1.9250. USDCAD: Capping around 1.2870 so farafter finding a base at 1.2800 Two-way business still expected amid all the fickle market tones but option interest definitely in play too.
Let's continue to be careful out there in all things. Have a good week-end.
Interbank rates: 08.50 BST
GBPUSD 1.2320
EURUSD 1.0544
EURGBP 0.8547
GBPEUR 1.1690
GBPJPY 160.84
GBPCAD 1.5881
GBPCHF 1.2136
GBPZAR 19.7678
GBPHKD 9.6060
USDJPY 130.56
EURJPY 137.62
EURCHF 1.0392
EURHKD 8.2095
AUDUSD 0.7077
USDCAD 1.2848
USDCHF 0.9860
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