Friday 11 December 2020
After the Brexit deal got kicked down the road again,we've had Johnson talking no deal as part of the posturing and now this morning BOE Governor Bailey has been spouting off about negative interest rates again. Cue the Pound falling in rapid style.
Yesterday we had the latest ECB monetary policy decision/rhetoric amid the EU Council meeting.No change in rates and lots of hot air from Lagarde with only a nod to the EUR exchange rate to say they will keep closely monitoring.
COVID is still casting its sad shadow and markets are still second-guessing the fall out to come and the US stimulus package unknowns remain in the mix.Variable risk sentiment continues.
GBPUSD is on the back foot again and has tested 1.3180 this morning but bouncing as I type as traders, including me, take a few profits on short positions amid the ungoing certainty. EURGBP held around 0.9080 as GBP started to retreat, then 0.9120 became a good platform before posting 0.9193 this morning but GBP dip demand prevailing for the moment. I remain a dip buyer overall while still respecting the Brexit-led volatility.GBPJPY capped around 139.30 then 138.80, then 138.60 before dropping sharply on the GBP tumble this morning.
I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.Patience continues to be a virtue and rally-selling in GBPUSD is still bringing reward but entry level key as always. Definitely still expecting some dip demand amid all the volatility as I've warned for a while now. Brexit still the large elephant in the room.
USDJPY failed above 104.50 then 104.30 but has held 103.80-85 again in the latest retreat and pips gratefully banked before bouncing back above 104.00 amid some general USD demand but sellers remain poised, as do I. EURJPY remains tightly bound in relative terms and now testing 126.20 after failing into 126.80 as core pairs both found rally sellers amid the sentiment and cross flows. EURUSD held 1.2080 but failed at 1.2160 yesterday and again this morning to test 1.2120 bids as I type but still tightly bound as the jury remains out on Brexit and the ECB with cross flows definitely in play. A reminder that we have around large EUR option Calls at 1.2000 across next week to keep in mind as well.USDCHF remains tightly bound but on the back foot still and now clinging onto 0.8850 having failed above 0.8900 with EURCHF falling/EURUSD rallying but with the SNB still ever watchful.
AUDUSD remains underpinned and made steady gains to post 0.7570 with iron/copper prices still helping to support along with AUDJPY risk-on demand. USDCAD finally fell through 1.2775 amid the softer USD/firmer oil price combo and been down to test 1.2700 before boucing this morning on some reverse USD/Oil moves.
Markets are ever-fickle so don't forget to contact me if there's areas that you might need some further help with.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a great week-end.
Interbank rates: 08.43 GMT
GBPUSD 1.3216
EURUSD 1.2122
EURGBP 0.9177
GBPEUR 1.0892
GBPAUD 1.7528
GBPCAD 1.6853
GBPJPY 137.54
GBPZAR 19.9510
GBPHKD 10.2573
USDJPY 104.13
USDZAR 15.1041
EURJPY 126.27
EURCHF 1.0757
EURHKD 9.4173
AUDUSD 0.7534
USDCAD 1.2760
USDCHF 0.8871
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