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Category: The Sterling Digest

The Sterling Digest now as a weekly summation of news to consider when trading GBP pairs, in particular.

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Sterling Digest: March 29, 2012

World markets as sheep falling off a cliff
UK is right on the edge

There are very mixed reactions to the UK economy. While it certainly appears that the UK is suffering from a double-dip recession, the government is in denial. The BoE is not confident that the economy will grow again at pre-crisis levels. And economists are dubbing this economy worse than the Great Depression. While it doesn’t seem that sterling can rally on such outlooks, it has and remains resilient in today’s trading. However, how long can that remain the case? Remember, the market can remain irrational as long as it pleases.

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Sterling Digest: March 28, 2012

Kal's Cartoon on The Economist
All eyes on oil

Sterling manages to stage a decent correction in today’s trading session. Yet, it is the AUD taking it on the chin today as it suffers from a double whammy of commodities weakness and USD strength. It was the only currency pair that sterling rallied higher against without much pullback. The timing with now confirmed Chinese softness (causing the commodities weakness) gives the $GBPAUD legs to run higher.

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Sterling Digest: March 27, 2012

Britain's budget for global business
Weak economy, strong sterling. Go figure.

Sterling refuses to weaken even as economic data slips and members of the BoE still look to add more QE. The $GBPUSD continues to make higher highs at 1.5999 though still remains capped by the major 1.60 level. Even the almighty commodity dollars (AUD, NZD, and CAD) are weak against the GBP. Are we seeing the beginnings of a bear trend reversal in sterling?

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Sterling Digest: March 23, 2012

Beautiful golf course
Enjoy the weekend - my friend and fellow trader has the right idea here

Being wrong early in cable kept me on the sidelines for the rest of the day. A good day to be out as the $EURGBP, $GBPUSD, and $GBPJPY saw whippy sideways actions to end the week. The $GBPCAD, $GBPAUD, and $GBPNZD came off their breakout highs as commodities firmed up a bit today after vicious selloffs all week. The question for the new week is whether sterling continues to consolidate or will the bull trend resume? Until that time. Enjoy the weekend.

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Sterling Digest: March 22, 2012

UK - London: Oxford Street - Marks & Spencer
Most iconic chain store in the UK yet retail sales drop

Poor UK retail sales weakened sterling across the board. However, it remains to be seen if this weakness will be sustained or if it merely provides buying opportunities for bulls.

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Sterling Digest: March 21, 2012

I think I see a recovery on the cover of The Economist
UK forecasts 2012 GDP at 0.8%

A big day in UK politics with release of Bank of England minutes and the announcement of the country’s budget produced incredible moves in sterling today.

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Sterling Digest: March 20, 2012

10 pounds down the drain
Down drain into a pile of money

The new trading week may have opened with GBP bullishness but as the Monday session ended sterling slipped across the board into Tuesday’s UK inflation release. Expect GBP to weaken further on softer-than-expected inflation even though it is certainly a good thing for the British economy. Don’t expect much follow through on weakness. Sterling may look weak on fundamentals but recent price action favors GBP.

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Sterling Digest: March 14, 2012

Coinage
Despite the bears, sterling won't fade easily

No real surprises from the $FED or the BoJ yesterday as both left interest rates unchanged. With equities higher still after the FOMC statement, it is hard to see risk currencies fall more from here. While the USD seems to be trading on fundamentals (rising on good US news after both US NFP and somewhat hawkish Fed statement), it remains to be seen if that is a new shift in the market or if risk still rules investor sentiment.

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Sterling Digest: March 12, 2012

Lots of big talk made for lots of nice moves in the forex markets today. These central banks are only warming up with comments from Japan today ahead of their official interest rate decision tomorrow. But the $FED has taken to jawboning too. They also release a decision tomorrow but have been in the press for weeks. Lots of focus has been on the $USDJPY with its recent moves higher which should make the conspiracy theorists among us very anxious for Tuesday trading. At any rate, sterling flows were liquid in both directions today depending on your currency pair.

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Sterling Digest: March 11, 2012

World Money Expo
An ironic find on Flickr: the World Money Expo. In China

This week rounds out the major central bank announcements for the month of March. Three central banks are on tap to release decisions on monetary policy: the Bank of Japan, the Federal Reserve, and the Swiss National Bank. Of course, the Fed is the highlight. But with the Fed in the news so much last week, one has to wonder what more the Fed can give the markets.

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