Exit The Euro

Chart: the deleveraging process is desynchronized and heterogeneous

It has to be a very scary thing when your banks, companies, households and even governments can’t pay down its debt. Can a currency be made worthless based on its debt load in a world where money is electronic and can be minted with a push of a button? We just may soon find out. Exit the euro.

Sterling Digest, May 10 2012: NO QE4

The Beautiful British Pound Sterling
Beautiful trend in sterling continues on

The euro sank this week as the Eurozone became unhinged in political elections that ousted leaders who led the charge for austerity. $GBPUSD followed in sympathy but today’s BoE decision to hold off on another round of quantitative easing (QE4) has lifted sterling across the board. As with any strong trend, the contrarians are circling. Many bears are out looking to short sterling especially in $EURGBP and $GBPUSD. But this bull trend in sterling is not one to step in front of. Don’t fight the flows!

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Sterling Digest, May 4 2012: NFP preview

JOB Toulouse
Jobs remain important catalyst for markets

The spotlight event of the month for the forex markets is today’s US NFP release. As USD sentiment seems to have shifted to fundamental flows rather than risk flows, a disappointing number could weaken the USD. $GBPUSD has found support at 1.6160 all week. US NFP should be a catalyst for further correction or a continuation of the bullish trend.

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Sterling Digest, May 2 2012: European dealings

collage of the economist covers featuring the euro
Euro woes benefit sterling

$EURGBP has broken to new yearly lows in today’s trading as sterling continues to gain against the euro. UK economic data continues to come in mixed but, despite the consensus, PMI numbers above 50 suggests the economy has signs of strength.

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Sterling Digest, May 1 2012: the doves rally sterling

The rather dangerous, The Economist cover
The political reason the ECB turns dovish

Everybody knew that the RBA was set out to cut interest rates. But the RBA surprised the market with a much bigger than expected cut of 50 basis points. $GBPAUD rallied hard after the announcements and remains over 100 pips above its pre-RBA levels. The ECB also delivers an announcement on interest rates this week. The ECB is also expected to be dovish as the central bank shifts its focus off the banks and on to their economies. The $EURGBP remains below 0.82. Can sterling continue its rally on dovish sentiment from other central banks?

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