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 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!
- Bank of England stops QE as inflation worries weigh (Reuters)
- MIXED INDUSTRIAL NEWS (EconomicsUK.com)
- GBPUSD Update (50’s Blog)
- GBPNZD 4H: anybody like the 2.03 area? (Chart.ly)
- EUR/GBP: .8000 Should Prove Magnetic (Forex Live)
- Euro Drops to 3-Month Low After Greek, French Elections (Bloomberg)
- BOJ really not liking the sym triangle at major harmonic reversal level (Chart.ly)
- BOJ Apr 9-10 Minutes: Agreed To Monitor Feb Easing Effects (Forex Live)
- Cameron didn’t learn from Lamont on recession – early sharp cuts hurt (The Guardian)
Sterling Digest, May 4 2012: NFP preview
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.
- NFP Friday (Big Trading)
- Risk Management On GBP/USD And GBP/JPY Ahead Of NFP (FX360)
- GBPNZD brokeout of the weekly trendline resistance (Chart.ly)
- GBPUSD Daily – October High Offering some support on the sterling correction (Chart.ly)
- Solid growth of UK service sector signalled in April (MarkIt Economics) [pdf]
- SERVICES COOL A LITTLE (EconomicsUK.com)
- Forecasts on UK economy point to further downturn (The Guardian)
- BOE King: Low Interest Rates Needed Now To Get Steady Growth (Forex Live) [Here is an interesting response to King’s speech.]
- BoE should have given stronger crisis warning (Reuters)
Sterling Digest, May 2 2012: European dealings
$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.
- SOME INTERESTING NUMBERS (EconomicsUK.com)
- David Cameron warns European debt crisis is far from over (The Guardian)
- Goldman’s O’Neill Candidate for BOE Governor (Bloomberg) [This is the same guy. Yikes.]
- Australian Bonds In Big Demand Again (Forex Live)
- Eurozone PMI and rate changes (Reuters) [chart that makes the case for ECB rate cut]
- EUR/GBP: If You Want To Know Why Its Falling, Have A Look At The SNB (Forex Live)
- EURGBP Update (50’s Blog)
- GBPUSD Update (50’s Blog)
Sterling Digest, May 1 2012: the doves rally sterling
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?
- UK PMI Falls, Export Orders Tank Thanks To Bad Sales In Europe, Asia, And The US (Busines Insider)
- Manufacturing still growing, CBI says (The Guardian)
- It Is Official – The RBA Is Working The Australian Dollar Lower (Seeking Alpha)
- Downturn In Australia According To US Corporate Chiefs (Forex Live)
- ECB Will Eventually Opt For A Rate Cut Over LTRO (eFX News)
- Notes from the DoubleLine Lunch with Jeffrey Gundlach, Spring 2012 (The Reformed Broker)
- EURGBP Update (50’s Blog)
- GBPNZD Update (50’s Blog)