20161031 – DAILY FX COMMENT

  High Low     High Low
EUR/USD 1.0993 1.0953   USD/ZAR 13.86 13.69
GBP/USD 1.2218 1.2170 GBP/ZAR 17.03 16.68
EUR/GBP 0.9027 0.8988 USD/ILS 3.8711 3.8211
GBP/EUR 1.1126 1.1078 S&P 500 2136 2122
USD/JPY 104.97 104.39 Oil (Brent) 50.77 50.23
GBP/AUD 1.6141 1.5990 Gold 1279.0 1273.0
        USD/NGN yesterday’s close   470
             
Please get in touch with us if you need the latest USD/NGN price    

 

Hope you all had a good weekend.

If you thought Brexit was all about lies and deceit welcome to US election politics. What a dirty ugly campaign we are witnessing. Regardless of your vote, what the FBI pulled last week was properly dirty. Totally unnecessary and the timing could not have been more arrogantly obvious. After Ms Clinton appeared to be running away with the gong, the FBI and their Director (who happens to be a Republican and Trump supporter) decided to “re-open” the can of worms. Been there done that. Ms Clinton has already dealt with her emails, none of which were deemed to be a national security risk. So it is not hard to see why the FBI decided to launch this new round of email investigation? Was it in order to make the playing field a little more interesting with just a week to go? As far as I am concerned nothing has changed and there is nothing new (not that I have read the 650k emails) to derail who I believe should be next President of the United States.

On Friday the US commerce Department announced that the US economy expanded at an annualised 2.90% in Q3, the fastest in 2 years. I am jealous, as those were the numbers the UK were at pre 23/06. Alas that’s gone up in smoke. Anyway, if you were not aware, tomorrow and Wednesday the FED are meeting to decide on monetary policy. I am cautiously optimistic that the FED will stand down and do nothing with only 6 days to go to elections. While the FED are of course independent and do what they please, I do not think they would ever play into the politicians hands and rock the boat by changing interest rates (monetary policy) and make comments aimed at derailing either of the candidates. So come Wednesday eve, I think the Pres of the FED will choose her words carefully citing December as the next possible date to decide. As you have read previously, I still think there is a good chance the FED will hike 0.50% and by doing so set the tone for the USD and US economy going into 2017. It is a gamble, but what a statement they would make if they did. The US economy is vibrant and cooking on all cylinders. We are open for business. Granted data between now and then must continue to shine.

Friday saw the USD sell off following the revelation by the FBI but has since recovered somewhat to trade at EURUSD 1.0950 and GBPUSD 1.2180 at the time of writing. What is pretty certain amongst traders and investors is a Clinton win will provide more clarity and security with regard to national interests, foreign policy and trade negotiations. The clear uncertainty that will prevail should Mr Trump win is simply too much to bear. Can you imagine for a moment Ivanka and Donald Jnr running around the White House carrying “The Football” (for those of you who are unaware I am not referring to an oval ball used in the NFL). If you thought Brexit was a mess, my gosh a Trump win will send financial markets into a tail spin. I just cannot bear to think of that.

Reports over the weekend that the Governor of the BoE could step down and return to Canada. First of all that would be a major catastrophe and one which would send the GBP into freefall. If you read the story in the Daily Mail and viewed the comments I was utterly mortified and horrified by the sheer hate by the majority of the 4k or so comments. Right wing nutters who know practically zero about what it takes to be a Central Banker or more importantly how to manage monetary and fiscal policy of an economy the size of the UK. It worries me just how ignorant and deluded so many people are and these are the same people that voted Brexit. Honestly it is simply shameful.

For the coming week I think the USD will probably trade sideways as the FED announce their decision on Wednesday and the debates for Clinton and Trump continue at full force. As far as the GBP is concerned, my views do not change…small recovery followed by stronger sell offs taking us overall to lower big figures.

Have a great week ahead

DISCLAIMER

Any financial promotion contained herein has been issued and approved by ParityFX Plc (“ParityFX”); a firm authorised and regulated by the Financial Conduct Authority (“FCA”) as a Payment Services Institution with registration number 606416.  It is for informational purposes and is not an official confirmation of terms.  It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to.

Opinions expressed are subject to change without notice and may differ or be contrary to the opinions or recommendations of ParityFX. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, ParityFX does not accept any liability arising from the use of this communication.

Follow our tweets @parityfxplc

Follow us on LinkedIn ParityFX Plc; and at www.parityfx.com

20161020 – DAILY FX COMMENT

  High Low     High Low
EUR/USD 1.0980 1.0952   USD/ZAR 13.92 13.80
GBP/USD 1.2299 1.2262 GBP/ZAR 17.10 16.94
EUR/GBP 0.8940 0.8920 USD/ILS 3.8414 3.8216
GBP/EUR 1.1211 1.1186 S&P 500 2150 2141
USD/JPY 103.78 103.33 Oil (Brent) 53.22 52.82
GBP/AUD 1.6032 1.5877 Gold 1273.0 1268.0
        USD/NGN yesterday’s close   455
             
Please get in touch with us if you need the latest USD/NGN price  

Today we will find out how the UK’s Retail Sales numbers faired for September. Analysts are predicting +0.40% from -0.20% in August. Let’s not get ahead of ourselves here. The rise (if it comes out as expected) is the result of the mini tourist boom since the GBP collapsed 20%. Retailers have been reporting mixed results of late with the likes of Burberry up 30% and while Ryanair down 5% and Foxton’s 34% all pointing to the weak GBP being the reason. Barclays reported in the daily Global Macro that “The UK labour market continued to show resilience in August, with the lowest unemployment rate since September 2005 and core wage growth hovering around 2.2% since October 2015. We expect Brexit to push up unemployment only gradually, likely at the turn of the year, and prevent upward wage growth pressures from building, thus forcing households to be more prudent and reduce private consumption by end-2017.” In my commentary yesterday I noted that with inflation heading to 2% (and the rest) net income amongst households will fall resulting in a change in shopping habits amongst consumers. As wages stagnate (and potentially fall in real terms) and companies put investments on hold, consumers will become aware of the changes to their incomes pushing up demand for benefits and further straining the Treasury.

PM May will announce to the EU (today) that there will be no second referendum on the UK’s EU membership. EU President Tusk has noted the UK’s future relationship with the EU will not be on the formal agenda but will give the PM the opportunity to set out the “current state of affairs in the country” over coffee. Coffee …. Ha ha is that the best the UK can do now. Oh how the mighty have fallen. In other words it proves just how far down the UK is on the priority list for the summit (& EU).

The decision by the UK’s Treasury to allow pensioners to sell their pension annuities has been scrapped by the Government amid warnings it could have turned into a mis-selling time bomb. Or is it a case that PM May wants to distance herself even further from Mr Cameron and Osborne’s policies. With every passing day the PM is tearing up all the good work the former leaders achieved and which sent the UK to the top of the global GDP tables. With one swipe of the pen, we now find ourselves heading towards numbers the likes of Zimbabwe. So where to from here you might ask…the simple answer is probably lower but then again anything can change that. Overall we know what will happen when Article 50 is invoked and we officially leave the EU. We know the EU will not give us a handout without safeguarding their 27 members. While the GBP managed to rally from 1.2150 Monday to 1.2350 yesterday, we now await the next round of comments. What is certain is all the recent bad news has been blamed squarely on Brexit and rightfully so. What a shame really as things we scootering on by so nicely and everyone was feeling perky and spending. Now that’s all changed and businesses and consumers are feeling worried (the remainers). The leavers well they will simply not admit to anything. It’s a lie and scaremongers didn’t you know !!!

 

 

DISCLAIMER

Any financial promotion contained herein has been issued and approved by ParityFX Plc (“ParityFX”); a firm authorised and regulated by the Financial Conduct Authority (“FCA”) as a Payment Services Institution with registration number 606416.  It is for informational purposes and is not an official confirmation of terms.  It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to.

Opinions expressed are subject to change without notice and may differ or be contrary to the opinions or recommendations of ParityFX. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, ParityFX does not accept any liability arising from the use of this communication.

Follow our tweets @parityfxplc

Follow us on LinkedIn ParityFX Plc; and at www.parityfx.com

20161018 – DAILY FX COMMENT

  High Low     High Low
EUR/USD 1.1026 1.0994   USD/ZAR 14.18 14.10
GBP/USD 1.2274 1.2174 GBP/ZAR 17.33 17.13
EUR/GBP 0.9033 0.8981 USD/ILS 3.8462 3.8103
GBP/EUR 1.1135 1.1071 S&P 500 2137 2126
USD/JPY 104.07 103.67 Oil (Brent) 52.35 51.84
GBP/AUD 1.6022 1.5917 Gold 1262.0 1253.0
        USD/NGN yesterday’s close   460
             
Please get in touch with us if you need the latest USD/NGN price  

BIG day today data wise for the UK. CPI – a measure of how much prices have risen for September. Analysts are expecting +0.9% from +0.6% YoY which really is in line with what we are thinking given the 15-20% fall in GBP.

I am an avid reader of the newspaper The Daily Mail. I often get involved on the comments section (my handle is doubletot in case you were wondering) writing my views and comments on articles published online (those related to the GBP of course). Honestly having been in the markets for over 23 years and traded during some of the most volatile periods in our history it makes me laugh (and cry out loud) AT SOME OF THE STUPIDEST AND WEIRDEST COMMENTS I HAVE TO READ. Basically people are saying that the price rises are the result of the greedy bankers and corporates who are taking advantage of the current rate of exchange as well as the incompetent BoE Governor Carney (who they say only looks after the banks/bankers/funds). Seriously are these people totally demented? They further state that the GBP was overvalued to begin with and it is the banks and hedge funds (and BoE) that have driven the GBP lower rather than Brexit. Seriously!!! The GBP was nowhere near overvalued and given that the UK was the fastest growing economy (excl China India etc.) pre referendum, it was pretty fair to say the rate at 1.50 was spot on. In fact had we voted to Remain the GBP would currently be trading in the 1.47/1.52 range in my opinion after the US delayed raising rates in September.

We (the remainers) and I who wrote repeatedly that a leave win will send the GBP to 1.25 and send prices sky rocketing. We were not trying to scare people, we were telling it as it was. And so it came to pass that leave won and here we are. Marmitgate petrolgate pricerisegate you name it, the simple fact is the UK is a net IMPORTER and therefore the fall in the GBP has resulted in the higher costs for gasoline companies and food/manufacturing companies to bring their goods onshore. These higher costs are now being re-directed to the consumer who will find their take home pay cheque shrinking. We WARNED BREXIT followers. They never listened and now they blaming everyone else for the higher prices rather than themselves for being so short-sighted. I am still in denial at the prospect of leaving the EU. How has this happened? Why has this happened? How was it allowed to happen? While I certainly do agree with some of the issues surrounding Brussels and immigration there were other ways we could have tackled those issues. Unfortunately it was not to be and we now find ourselves paying £1.16l at the pumps not to mention the price rises in food and clothing. It is no wonder foreigners are flocking to the UK to buy goods and property. They are 20% LOWER than 23 June. Remember when the GBPUSD hit 2.11 and we all flocked to the States laughing how cheap Ipad/phone/clothes/hotels were. Swings and roundabouts and now it’s happening to us. The extra spending by the tourists will help retailers but certainly not fill the gap left by locals who have tightened their belts. Retails already coming out saying how bad things are and talk is another BIG name on the high street is going to throw in the towel. Well done Leavers and well done to our new PM (for pressing ahead for a hard Brexit). Oh what I would do to have Mr Cameron and Osborne back again. I miss them.

So on this fine Tuesday morning ladies and gents I would like to welcome you to GREATER rip off Britain. Make sure you keep your job, tighten your belt, hold back on buying unnecessary items and start saving.

With the impending release of the CPI number, the GBPUSD has rallied (if you can call it a rally) to trade at 1.2250 and EUR GBP 0.9000 (GBPEUR 1.1111) …. The reason is with CPI rising the logical thing would be to raise interest rates. However with the economy likely to shrink from 2.8% GDP to 0.80% next year the Governor is absolutely right and should leave rates where they are until things settle down. Exporters are high fiving each other so that should help short term…but and as I said in my comment on the DM – the UK is a net importer of goods and services, and therefore companies will simply have to raise prices which will be passed on to you and I – or what refuse to pay the higher prices and risk going out of business?  I think you know the answer to that question.

My favourite saying whilst living in South Africa was “kak and betaal” which simply translates into “cough and pay” – I reckon that says it all.

Regards

 

DISCLAIMER

Any financial promotion contained herein has been issued and approved by ParityFX Plc (“ParityFX”); a firm authorised and regulated by the Financial Conduct Authority (“FCA”) as a Payment Services Institution with registration number 606416.  It is for informational purposes and is not an official confirmation of terms.  It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to.

Opinions expressed are subject to change without notice and may differ or be contrary to the opinions or recommendations of ParityFX. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, ParityFX does not accept any liability arising from the use of this communication.

Follow our tweets @parityfxplc

Follow us on LinkedIn ParityFX Plc; and at www.parityfx.com

20161011 – DAILY FX COMMENT

  High Low     High Low
EUR/USD 1.1142 1.1117   USD/ZAR 13.94 13.75
GBP/USD 1.2379 1.2275 GBP/ZAR 17.16 17.00
EUR/GBP 0.9046 0.8996 USD/ILS 3.8016 3.7758
GBP/EUR 1.1116 1.1055 S&P 500 2167 2159
USD/JPY 104.07 103.56 Oil (Brent) 53.36 53.06
GBP/AUD 1.6333 1.6232 Gold 1262.0 1255.0
        USD/NGN yesterday’s close   477
             
Please get in touch with us if you need the latest USD/NGN price  

More of the same really. Another terrible day at the office for the Pound. Teetering around 1.23 (USD) and 1.1050 (EUR) it seems there is simply no let up.

Ex-Governor of the BoE commented yesterday that the fall in the GBP was a good thing. Really? That’s news to me. The simple reason for his comments is the fall in the GBP is likely to send inflation spiralling towards 3% which is what the BoE have been trying to do for years. Basically we have already been warned that petrol prices, food and clothing prices are likely to rise between 10-15% over the coming months as retailers pass on the higher cost of goods (to import) onto the public at large. Best you go and stock up your fridge and but some jerry cans to horde fuel. Welcome to higher prices and even more rip of Britain. What makes me laugh out loud is the so called scaremongering was passed off as hearsay and a storm in a tea cup. I am afraid this was not scaremongering this was fact. The BoE, IMF, FED, ECB and World Bank all came out pre referendum and said a Brexit vote would be catastrophic for the UK. And so it came (coming) to pass. All those people that voted leave are now responsible for what is about to happen in this country. We are slowly but surely becoming a pariah state. I have no doubt in my mind that the EU are going to deal a terrible hand and heavy hand when negotiations actually start. You see you simply can’t beat the EU. They are absolutely right in there comments that if the UK want a hard Brexit – they will get one and then some.  After all the EU want to scare other EU states in thinking that leaving the EU is a good thing. No wonder Greece stayed!!

The coming months are going to continue bringing extra strain on the UK economy and what worries me is the hard Brexit will cost the Treasury 10’s of billions of pounds in loss revenue from taxes. What I fail to understand is why Brexit Secretary Davies and the PM are categorically saying that MP’s will have no say in the negotiations are even ratifying the decision to leave the EU. I bet they are worried the vote will turn out quite different to the electorate. For once I totally back Ed Miliband and his call to have MP’s involved. He and his backers are absolutely right.

Wishing you a good day ahead

DISCLAIMER

Any financial promotion contained herein has been issued and approved by ParityFX Plc (“ParityFX”); a firm authorised and regulated by the Financial Conduct Authority (“FCA”) as a Payment Services Institution with registration number 606416.  It is for informational purposes and is not an official confirmation of terms.  It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to.

Opinions expressed are subject to change without notice and may differ or be contrary to the opinions or recommendations of ParityFX. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, ParityFX does not accept any liability arising from the use of this communication.

Follow our tweets @parityfxplc

Follow us on LinkedIn ParityFX Plc; and at www.parityfx.com

20161010 – DAILY FX COMMENT

High Low High Low
EUR/USD 1.1207 1.1169 USD/ZAR 13.91 13.75
GBP/USD 1.2445 1.2374 GBP/ZAR 17.29 17.06
EUR/GBP 0.9032 0.8988 USD/ILS 3.8369 3.7653
GBP/EUR 1.1126 1.1072 S&P 500 2161 2152
USD/JPY 103.41 102.80 Oil (Brent) 52.08 51.47
GBP/AUD 1.6434 1.6255 Gold 1265.0 1255.0
USD/NGN yesterday’s close 475
Please get in touch with us if you need the latest USD/NGN price

It really comes as no surprise that the GBP has been brutalised. Call it fat fingers call it “black box” selling call it what you like, the fact is the GBP was always facing brutality and round 2 has now happened. We correctly predicted back in June that if Brexit happens the GBP will fall to 1.25 and fall it has.

I mentioned many times in this commentary that what I found very strange during the referendum was the complete absence of the then Home Affairs minister Ms May. It all makes complete sense to me now. PM May was a LEAVE campaigner. I therefore have no doubt that ex PM Cameron probably asked Ms May to “take a back seat” in return for her being made PM should Brexit happen, or if not then PM once Cameron resigned ahead of the 2020 election. Pure political give and take. And so it would come to pass that Brexit happened and Ms May became PM May. With the dust settled Ms May has now started to play hard ball with the EU promising a hard Brexit. Promise as she “May” the EU have fought back saying if the UK want to control immigration then we will lose access to 500 mio potential customers. The UK cannot have one foot in and one foot out. It is all or nothing. So the markets responded to this rhetoric and smashed the GBP into the gutter. Have some of that.

With the UK a net importer of goods and services the weak GBP will wreak havoc with GBP and send the economy into freefall over the coming years. Ignore the current numbers as they mean nothing. I say that because as things stand we are still a member and enjoy the fruits of EU membership. Once Article 50 is announced and we start to lose access to the EU market then we can start to evaluate the severity of Brexit. It pains me still that 17.4mio people voted leave thinking they would be better off. How. How on G-D’s beautiful planet is that possible? You see as an importer of goods and services the weaker GBP is going to hurt every man women and child in this country. Prices WILL HAVE TO RISE STEEPLY as companies pass on the higher costs to their clients – you and I. To add to this, there are over 700,000 jobs that are currently open but which UK citizens refuse to accept as they believe they are not within their standing. Vegie and fruit pickers, bar and restaurant staff, supermarket packers, cleaners, security and other “lower” pay jobs. So tell me PM May who will fill the void once the process begins. Of the 3.5mio EU citizens working in the UK the majority will be allowed to stay. But what about generating NEW JOBS and expanding. Where will that sea of labour workers come from? Certainly not from here as low income families will prefer to bleed to country and stay on benefits. Why on earth would you wake up at 4am to pick carrots at £6.70/hr when you can get that and more in benefits? Why on earth would you wake up at 4am to get a bus (at a cost) to go clean a hotel (not to mention having to find someone to look after your kids at a cost). You get my point I am sure. Low income better benefits > low paid minimum wage jobs. And that my dear reader is why the UK is heading into the South Pole and be frozen out. Just writing this sends a cold chill down my spine.

On a separate note Friday saw the US publish NFP – 156k (lower than 167k expected). The number while in line with what we were expecting still leaves me thinking that come December the FED will go ahead and raise rates. If Hilary wins I think that will help the FED’s cause and I still think the FED will surprise us all and hike 50bps starting a USD rally that will take us into 2017 and set the tone and lay the groundwork for EURUSD – PARITY  (1.00:1.00). As the USD rallies the GBP will suffer a double whammy, Brexit consequences and a USD rally. I cannot see any good news coming down the line.

Hope I have not ruined your week..

 

DISCLAIMER

Any financial promotion contained herein has been issued and approved by ParityFX Plc (“ParityFX”); a firm authorised and regulated by the Financial Conduct Authority (“FCA”) as a Payment Services Institution with registration number 606416.  It is for informational purposes and is not an official confirmation of terms.  It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to.

Opinions expressed are subject to change without notice and may differ or be contrary to the opinions or recommendations of ParityFX. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, ParityFX does not accept any liability arising from the use of this communication.

Follow our tweets @parityfxplc

Follow us on LinkedIn ParityFX Plc; and at www.parityfx.com