Rather quietly the S&P 500 has exceeded last year’s record high and looks set to power on to greater highs. This fits in rather well with my bigger picture Elliott Wave count for the bull trend that began all the way back in March 2009.

If my count is correct then we have quite some way to go before we need to worry. Obviously I wouldn’t be pointing this out if it didn’t have implications for the currency markets. As things stand it is clear that risk sentiment, while taking a very temporary hit from the Brexit vote, has recovered nicely, and looks sent to continue in positive fashion. Even more pertinent is the fact that policy makers are likely to be taking note of the market action and consumers will be buoyed by the positive wealth effects of the rally. Based on this, and the stabilising political situation in the United Kingdom, it is likely that in the coming months the Federal Reserve will again place monetary tightening firmly back on the agenda. If this is indeed the case then, we can expect the dollar to strengthen as the market starts to slowly price in an increasing probability of higher US interest rates. I wouldn’t be surprised to see stronger consumer spending on the back of the equities rally, and I should also add that it’s noteworthy that the rally kicked off on the back of the strong jobs data last Friday. That doesn’t feel like a market that’s afraid of higher interest rates to me.

Sterling continues to perform strongly following the resolution of the Conservative Party’s leadership contest, rallying almost 4% from the lows now. If that’s not enough there are signs that international investors are starting to look at opportunities to buy British assets on the cheap in the wake of sterling’s collapse. This is a sure sign that some now consider the pound sterling to be undervalued. A large US fund is rumoured to have had exploratory talks with the commercial property funds which were forced to reject demands by investors to get their cash back; and a South African retailer is looking at a takeover of Poundland a high-street discount store. As I mentioned in yesterday’s blog, there is an increasing risk of a fairly sharp rally in sterling, particularly if the MPC decides, on Thursday, that interest rate cuts are no longer on the table. But it’s important to note that as things stand, economists expect 3 of the 9 MPC voters to recommend a cut, this is in comparison to the situation in the last few meetings where voters have unanimously voted to maintain the status quo. Normality can return quickly after a crisis sometimes!

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It seems we should never under-estimate the capacity of the Conservative Party to make pragmatic decisions where their survival is concerned. Andrea Leadsom the lesser contender in the internal party election to select a new leader gracefully bowed out, recognising unlike the Labour Party that if, as a leader, you only command the support of a small percentage of your fellow MP’s how can your position possibly be tenable. I can only applaud her mature decision, and the markets did the same with a recovery in the pound sterling that continues this morning.

This is where it gets interesting. Mark Carney, the Bank of England governor, has been widely expected to cut rates at this Thursday’s MPC in response to the crippling uncertainty that’s been weighing on the pound. Does the quick resolution to the Tory party’s leadership question change things? I think it could. So what happens if he says that he’s going to take a wait and see approach? How will the markets react? The UK equity markets might not like it, nor indeed the gilts market, but if sterling has been sold on the basis that more monetary loosening is coming we might see a sharp jump in the pound. After all, as I pointed out in yesterday’s blog, under normal circumstances the pound sterling looks oversold. I’m not saying for certain, but there is definitely a risk of a bit of a nasty short squeeze if Governor Carney disappoints. Watch this space.

Last Friday we saw a very impressive bounce in labour market growth in the US after a few months of rather disappointing numbers. The consensus had been for 175,000 new jobs created, in fact there were 287,000 compared to 11,000 for the month of May. Interestingly the unemployment rate actually rose from 4.7% to 4.9%, but the U6 number – a broader unemployment number – fell from 9.7% to 9.6%. Perhaps the prior slowdown was a blip, but it will take a few more months of data to classify it as such. For now, this is a welcome data point for the market and policy makers to mull over. Will this have an impact on the Fed? Possibly, particularly when you also consider this chart from Business Insider..

Wage growth seems to be picking up. I don’t think this means the Federal Reserve will hike yet, there’s far too much Brexit noise around, but once that fizzles out, then tightening will very likely be back on the agenda in the United States. Bottom line, don’t get too bearish on dollars any time soon.

Elsewhere, in Nigeria, the central bank had warned that a new current account maintenance fee would be applied, and they were true to their word. Henceforth there will be a 1 naira fee for every 1,000 naira transfer between accounts. Let me put this in more comprehensible terms, if you have to transfer N10 million (~$28,500) you will be charged N10,000 (~$28.50). That’s 0.1% charge. It might not seem like a lot, but that is a huge amount of transactional friction. I appreciate that Nigeria is experiencing rather severe fiscal challenges with lower oil prices, but surely a tax that is likely to impact economic activity, or at the very least move money out of the formal banking system is a retrograde step. It really seems a case of one step forward and two steps back at the moment. We will have to keep an eye on the economic impact of this policy on the Nigerian economy, but clearly it can’t be for the good.

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We have seen a substantial decline in the pound sterling versus almost every other currency since the Brexit vote.

First we saw the collapse in the immediate aftermath of the vote, as the market was caught completely offside. As we all know, the final polls indicated that the ‘Remain’ camp would just sneak a win, but that wasn’t to be, and panic was the dominant theme in the market.

After the initial fall which continued on for another day or so, the market attempted to recover, but the selling pressure has been persistent. Clearly we all need to re-assess the prospects for the UK economy in light of this historic decision, but is that what’s driving the market now? Watching the rather toxic politics affecting the major parties in the UK, I am coming to the conclusion that the market is still terrified of the unknown.

In this case the unknown is whether Article 50, which initiates the process for an exit from the EU will be triggered or not. In theory, at least, this is not a certainty as the referendum is not by itself binding, only advisory. But it’s hard to believe any political party, not least the Conservative Party (with its history of Euroscepticism) would dare to go against the expressed will of the electorate. It seems to me that we are likely to continue to experience uncertainty until a new leader of the Tory party has been selected, and their strategy for dealing with the aftermath of the referendum is known.

As things stand that new leader should be Theresa May, the current Home Secretary, but we’ve been here before haven’t we? And I’m not even referencing the Brexit vote. Last year, after Ed Milliband’s failure to win the general election for the Labour Party, he stood down and left the way open for a new leader. No one expected Jeremy Corbyn to be the winner, but here we are. In opposition to the Labour Members of Parliament’s wishes, the wider party members voted for as left wing a candidate as could be found. Now, with a choice of the known and experienced Theresa May, who voted to remain, and Andrea Leadsom, a woman with very little front bench experience, who voted to leave. It is entirely possible that the rank and file of the Tory party might do a “Labour”, voting with their hearts and not their heads. This is exactly the sort of choice that could end up costing the Tories big. Yes the UK, has a parliamentary democracy and therefore the Tories would not be obliged to hold a general election, but it is questionable how much of a mandate a Leadsom premiership would have. Such a choice carries with it a substantial risk that the Conservative Party could be seen to have lost its electoral mandate only a year after winning power. It is entirely possible that, despite this risk, a calculation is made by the rank and file that the Labour Party is in such disarray that it doesn’t matter. They might be right. But calculations like this don’t exist in isolation and could well end up being the catalyst that sees the Labour Party get its act together and a more electorally palatable candidate like a David Milliband could be sitting across the floor in the House of Parliament in no time at all. The Tories would be wise to consider this.

So what does this all mean for the currency markets? As of right now, this move, when you look at GBP/USD (see below) or EUR/GBP looks stretched.

But I hesitate to say this is the end of it. We often see, during the most powerful trends, currencies persisting in extreme oversold paradigms for longer than one would normally expect. There is absolutely no reason to think this is not one of those times. I am therefore very cautious of viewing the market on a purely technical basis, the fundamentals (and in this case that means the politics) must be a guide. Until we have more clarity on the leadership of at least the governing party in the UK, it is too tough to say anything other than we believe the pound will continue to trade poorly. Bear in mind that after Carney’s post-Brexit speech he indicated that rates were likely to come down this summer. Later this week we get the MPC, and markets are pricing in a 75% probability that we’ll see a cut. Even if sterling is due a bounce, it’s likely to only occur after the decision…

Lest we forget the rest of the world there’s much more to discuss in coming blogs, not least the stunning turnaround in labour market data in the United States and a sort of Tobin tax on steroids in Nigeria. Watch this space

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Sometimes I really dislike democracy. It’s ok when people vote as you want them to, but on such a huge decision as this you just feel helpless. The EU referendum results are coming in and it’s fairly certain now that the United Kingdom has voted to leave. The markets have moved in fairly dramatic fashion. As I write this, European bourses are down more than 10%, the Nikkei down 8%, hundreds of billions of dollars in value have been lost. It all seemed so optimistic (if you wanted the UK to vote ‘Remain’) in the late evening, and then I started to get text messages and my phones rang while I tried to sleep. It was obvious that things had taken a turn for the worse. You don’t need to look at the exit polls for a timeline of how the vote was evolving, the chart for GBP/USD is a more potent illustration.

The politics are going to be very interesting now. Some argue that the EU will propose a better deal to keep the UK in, but I’m not sure how feasible that is for any number of reasons. The most obvious is that a large proportion of those who voted to leave, did so on the basis that there would be no circumstance in which they would change their mind. Another thing to consider is that the risk for the EU now, if they were to propose a new deal for the UK, would be that other Eurosceptic leaning countries like Denmark and Poland, and perhaps even the Netherlands might insist on changing their own relationship with the EU as well. Rationally it makes more sense for the EU to take a hard stance, in the hopes that it would dissuade any others from flirting with exit. At this point in time the priority in the upper circles of the EU has surely got to be containment.

In terms of currencies, I would suggest that we will see volatility aftershocks for the next few days. We really are in the unknown at the moment, but for the pound sterling surely there are significant problems ahead. For the last 30 years the UK has been the preferred destination for foreign direct investment into the EU, it’s entirely possible that a significant portion of those investments are now at risk. I have heard stories of major investment banks discussing Brexit contingencies which involve moving operations to places like Frankfurt, Paris and Dublin. But it’s more than that… consider the gilts market, since the global financial crisis of 2008, foreign investors have bought huge tranches UK sovereign bonds and the losses they are experiencing today are catastrophic. Do they hold on, do they stop loss? And what happens to the Eurobond business that’s been conducted out of the City of London for decades, it’s well known that the ECB has not been particularly enthused about so much offshore trading of euro denominated assets. And the big elephant in the room hasn’t even been mentioned yet. London property has been used as an alternative to gold for years, now the entire premise for that flight to safety trade has been put to the question. There are many significant reasons why we could and probably will see a structural outflow from the United Kingdom in the coming years, so it’s hard to be positive about the prospects for the pound sterling at this point in time.

The pound is not the only currency which is likely to be vulnerable now, the euro is surely in the firing line as well. Brexit represents a substantial negative to the Eurozone economy which will have to be reflected in the value of the euro versus other currencies. Even worse the market is likely to assign a break up risk premium to the euro. EUR/USD lower seems likely in my view. In times of uncertainty we would normally expect to see the dollar rally and that’s certainly what we’ve seen so far, but at some point the market will have to consider the fact that rate hikes by the Federal Reserve are probably off the table now. Counter-intuitively this could end up being a great opportunity to buy equities, as it wouldn’t be a huge shock if we see some sort of coordinated response from central banks to calm fears of a global recession. It might end up being the sort of over-reaction we saw in the aftermath of the crash in 1987, but everything always looks obvious in hindsight.

I can only summarise, on a morning in which we have seen a record move in GBP/USD, that we are likely to see a lot of volatility today and in the coming days. As politicians in the UK and the EU scramble to make sense of where we are, it’s likely that they will have a more significant impact on markets than normal. Please make your trading decisions carefully and recognise that heightened uncertainties mean that prices are fluctuating more than normal and spreads are necessarily wider than you have been used to.

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This is going to be an extremely volatile week with the referendum just a few days away now on Thursday 23^rd June. The most recent polls have shown the Remain campaign clawing back losses. I remain sceptical about the accuracy of the polling, as I am unwilling to assign too much confidence in the polling companies so soon after the election fiasco. It seems the market will take any information and run with it. So it’s not been a great surprise this morning to see a massive bounce in GBP/USD on the back of the polling update. There is a huge amount of uncertainty and this is reflected in the quadrupling of trading margins, and wider spreads over the next few days.

Even quotes for GBP/USD option premia have to be requested. If a sterling cross moves to your advantage, get your trade done, the situation might change at the drop of a hat….or at least a small sample poll update!

We’re starting to see evidence of convergence in the USD/NGN market as one would expect. Last week announcement by the central bank (CBN) that a more flexible exchange rate regime would be implement has resulted in the parallel market rate declining and the NDF market rising. Obviously there are inter-temporal issues when comparing the two markets – one is spot, and the other is the forward market – but this is convergence none-the-less. Both foreign investors and locals are taking a somewhat wait and see approach trying to gauge where fair value is, but these moves can only give confidence to investors that a new more transparent reality is evolving. A reality that can only be a positive for the Nigerian economy with businesses able to more effective plan without fear of a capricious central bank or government to stymie future assumptions. It is to be hoped that this new market consciousness extends to the import restrictions that the CBN has still not removed. If Nigeria is to develop any kind of functional manufacturing industry it needs to be free from senseless interventions.

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Not unexpectedly the FOMC statement indicated that rates would be kept on hold. If there’s one key takeaway from the statement it is that the Federal Reserve is now clearly in wait and see mode. Mixed economic data, jobs growth slowing, inflation contained even if rising, anaemic growth elsewhere and the looming prospect of the EU referendum in the UK next week are just some of the factors which supported the case for a more cautious approach. Guidance for growth in 2017 and 2018 has been trimmed, although somehow the FOMC members still believe that further rate rises are on the table for this year. Still, the terminal rate after the hiking cycle is now expected to be lower than in previous projections, which to my mind is simply a case of the FOMC getting closer to what the bond markets have been telling us for some time. 2 year bonds are yielding less than 0.70% and 10 year bonds are yielding barely over 1.50%. Clearly this hiking cycle is not expected to be too aggressive.

I wonder if ‘Leave’ campaigners in the EU referendum were paying attention. They might feel entitled to accuse the governor of the Bank of England of political bias because of his warnings about the consequence of Brexit, but will they feel brave enough to say the same about Janet Yellen? She too is concerned about the potentially negative impact on an already weak global economy. At a certain point, when enough independent experts present a consensus about adverse consequences, will the voters in the UK take note? We’ll find out soon enough, the referendum is now only 7 days away.

Back to the FOMC, here’s a snapshot of the market reaction before and after the announcement.

First a short term chart for EUR/USD…

And here’s the S&P 500…

The lowered probability of rate hikes really puts a dent into any bullish dollar view, and not surprisingly the dollar has been a big loser out of all of this. You can see that in the dollar basket DXY, and it’s clearly visible in USD/JPY which has broken through a support level I’ve been watching for a while. Now looking at the longer term chart, a major support zone is under threat, and probably Prime Minister Abe’s economic plans as well.

Over the next few days Brexit is likely to dominate the currency markets with traders already widening spreads in anticipation of significant volatility ahead. GBP/USD and EUR/GBP are the obvious currency pairs that will receive special attention as the most liquid sterling crosses, but the entire GBP complex will be under pressure. You should factor that in when considering your currency needs.

Elsewhere the Nigerian central bank (CBN) finally released information about its plans to move towards a more flexible exchange rate regime. You’ll know that for the past year we have been insisting that such a move was not just necessary, but inevitable as well. Reality has finally caught up. Reading through the details it looks like the plan will be a sort of managed or dirty float, in comparison to the fixed exchange rate that has been in place for some time. In this type of regime there is less pressure on the central bank to intervene in the FX markets, as there are no bands, or fixed points to defend, so this should aid the CBN in its attempts to stop the erosion of its reserves. CBN has indicated that plans are in place to select about 10 primary dealers who can trade with the central bank when there are large deals in a system that is intended to make the market more transparent and price competitive. This is all welcome news and should greatly improve the signals that pass through to the wider economy. However there are still some restrictions in place which are likely to cause distortions to the market: the 41 imported goods and services which had been banned from accessing the interbank market remain, and Bureau de Changes continue to be barred from the interbank market. This is a real pity, and frankly it’s surprising that President Buhari continues to believe that restrictions like this which cause distortions and thus create avenues for patronage are compatible with his laudable aims of eliminating corruption from the Nigerian politico-economy.

So what does this all mean for the naira? This is a huge step in the right direction and will go some way to eliminating the concerns that foreign investors have had about Nigerian economic management. It’s entirely possible that some might be lured back in to the debt and equity markets – certainly the positive reaction from Nigerian stocks might be an indication that at least some speculators believe that this will be the case. These changes are due to start next week on 20^th June, and as Reuters put it, the naira will trade somewhere between 197 and 370! I think that unquestionably this will eventually lead to some currency appreciation, but do bear in mind that there’s a lot of pent up demand for foreign currency in Nigeria. To begin with, I suspect that traders will be patient and look for better levels to buy dollars. With the distortions that have been kept in the market we aren’t likely to get full transparency, but it should be a more comprehensible market with hopefully a little bit more two way risk. The reality is that the naira is likely to find a level around the 300 level, perhaps even the high 200s in the months ahead. What will be even more interesting will be plans to develop a forward/ futures market to trade the currency. This will require a deeper more transparent short term yield curve and we will study the evolution of this and report back to you when we are able.

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Later on today the FOMC will announce their rate decision for June. This has been widely anticipated and while there are concerns that the Federal Reserve is still trying to maintain their positive outlook on the US economy, it seems increasingly likely that they will opt for caution. We’re a weak away from the EU referendum in the UK, an event that could spark significant volatility, it’s hard to imagine the FOMC being so incautious as to hike now, and be forced to retreat if a ‘Leave’ vote sparks substantial global volatility. I’m not saying that’s going to happen, in fact I still think that the vote will be to stay in the EU, but just thinking about what keeps central bankers up at night, being forced to reverse a recent decision has to  be very high on the list. It’s not as if the US economy as hitting the ball out of the park at the moment. Frankly I would characterise the economy in the United States as being better than most, but what does that really say in a world of anaemic global growth? So in summary, at a pinch, I don’t expect the FOMC to announce a hike. I’m actually more interested to see what the statement says. We will of course bring that to your attention in following posts, and discuss the implications for the currency markets.

8 days to go before the EU referendum and sterling looks to be taking a bit of breather so far this morning. It’s been a frenetic weak with substantial declines versus the euro and the dollar. A recovery of some sort certainly seems appropriate, and I am biased towards this, but as ever the new polls are likely to have an impact. I’ve said it before, and I’ll repeat it now, I am very sceptical about the polling in the UK at the moment. The last major event, the UK general election, did not do much for the pollsters credibility, so why exactly should we believe everything that we’re hearing now? Particularly as a similar dynamic might be in play. Consider it, the ‘Leave’ voters tend to be far more passionate, they are advocates of change after all. It just might be that the polling samples are very difficult to correct for the apathy of those who advocate staying in, and thus we’re not getting a truly accurate picture. It may also be that those who might have passed on voting because they felt that the status quo might be maintained might now be panicked into getting out and expressing their democratic right. I think this is the reality, this is what is likely to happen, this is why I think that in the end the vote will be to remain, with a 3 – 4% majority. We shall see soon enough.

We’re still waiting for the Central Bank of Nigeria to publish information about their plans to make the naira more flexible. As I said a few days ago, it’s hard to imagine a scenario where additional flexibility does not include some sort of devaluation, whether it’s admitted or not, it’s likely that by the end of today there will be some sort of concession. King Canute couldn’t push the tide back, and the Nigerian government cannot fly in the face of economic realities. Already this morning, my sense is that the naira is somewhat weaker than yesterday’s closing. Depending on the quality of the CBN’s announcement the naira is fully capable of achieving some sort of short term recovery. This could happen if the CBN’s announcement allays the concerns of the wider investment community and a path becomes available for outside investors to put money to work in the Nigerian economy. A rally of that sort is likely to be short term however as the realities of daily supply and demand will continue to dominate the value of the naira. In any case we will update you with the CBN’s statement and our view on the implications for the naira going forward.

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With polls showing the ‘Leave’ campaign gaining momentum UK markets have reacted badly this morning. Stocks are down, sterling is down, it’s really not a great start to the week. GBP/USD has gone through a number of levels we’ve been watching, and there is a real chance now that we might accelerate lower, but we would need to see a fall through the April lows just above 1.40 to entertain stronger conviction. One things for sure if it’s going to happen it should be a relatively quick move. I don’t know whether that means that Brexit is really going to happen, or that panic over Brexit will reach a crescendo.

I’m still betting that polls showing a tight race, or even ‘Leave’ winning might be the best thing for the ‘Remain’ camp. Why? Because I suspect there’s a silent majority which is perfectly satisfied with the status quo. Unless the chaos of Brexit energises some voters, they might not believe there’s a risk of ‘Leave’ winning and they’ll not make the effort to go out and vote. As the noise surrounding these polls reverberates across the British media the odds of complacency are surely falling. I’ll finish by just commenting on the polls themselves. Am I the only one who is sceptical about the polling companies after their disastrous showing at the last general election? Are ‘Leave’ the Labour vote this time around? We shall see in less than two weeks!

As the data on the Nigerian economy gets progressively worse. The central bank (CBN) has indicated that details will be announced soon about a move towards a more flexible exchange rate model. I’m not going to speculate about what that means, but seeing as the parallel market rate over 80% above the official rate, you don’t need to be a genius to figure out that there will be a devaluation of some sort implicit in the new arrangement. This is great news. Anything that enables market signals in Nigeria to become a bit more transparent, a bit closer to the everyday reality of ordinary Nigerians can only be a good thing. We will provide more detail when the CBN releases the news.

With all the Brexit drama, it’s almost easy to forget that we face some fairly key central bank decisions in the coming week. After the terrible non-farm payrolls employment report at the start of this month, the probability of a hike by the FOMC is surely diminished. But it’s worth noting that there’s still a chance of the FOMC choosing to look through the weak number because of the Verizon strike. This type of thing has happened before and the following month’s numbers showed a very strong bounce following the end of the strike. On that basis, I would suggest the risk of a June hike is probably higher than currently thought. We’ll know more on the 15^th. We will also get decisions from the central banks of Japan, Switzerland and the UK. We’re likely to see even more expansionary monetary policy from the Japanese on Thursday, but I can’t imagine there’ll be much excitement from the Bank of England. Even if they were so inclined, not ahead of the vote!

More so than most weeks, we will be subject to significant volatility. The pound sterling will be vulnerable to updates on latest polling data, and the market will be cautious ahead of the FOMC announcement. Exercise caution.

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With the politics surrounding the EU referendum in the UK heating up, the government – specifically the Treasury – continues to issue reports about the negative impact of Brexit on the UK economy. As much as the ‘Leave’ campaign rants about bias, the government is not the only one at it. Some of the top British high street bosses have also come forward to discuss the negative impact of Brexit, here’s the link.

According to Eric Rosengren, a member of the FOMC, the US is close to meeting the criteria that would justify a rate hike in June. The conditions the Fed set are:

1. i) Additional signs of a rebound in the US economy
2. ii) Further strengthening in the jobs market

• iii) Inflation trending towards the 2 percent target

It’s worth noting that Rosengren, the president of the Federal Reserve Bank of Boston, has historically been a hawk, so it’s important to observe that he is becoming more hawkish. The Fed minutes published last week have resulted in a narrow majority of economists polled by the Financial Times now anticipating a hike in June. 51% of the 53 respondents now say the FOMC will announce a hike in June.

Standby for some more of the Greek debt saga. The IMF and the EU (or should I just say Germany?) are at loggerheads over whether Greece needs debt relief or not. The reality is that Greece needs debt relief, even German officials privately accept this. At 180% of gross domestic product, Greek’s public debt is unsustainable, it’s the dirty little secret of the Eurozone, but… and here’s where it gets tricky, in order to sell the bailout agreement last year, German politicians described the bailout as a loan. If they are now forced to write some of that debt off, it becomes a de facto transfer which is something the German electorate never signed up for. It’s going to be very interesting because Chancellor Merkel’s position after the Syrian immigrant crisis is not what it was last year. I’m not sure they’ll be able to wriggle their way out of this, and the great lie will be revealed to all. This will all feed into volatility for the euro in the months ahead. This fits in neatly to the technical view we have of a downward pressure on EUR/USD in the months ahead.

At the moment we continue to be in a consolidation or holding pattern, with the odds greatly in favour of dollar strength when trends re-assert themselves.

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Signs of growing dollar strength are increasingly evident. USD/JPY is trading above 110 now and if I’m right and this move sees the currency pair trade into the 130s, Japanese stocks just might be a steal at these levels! That said, it’s the chart for EUR/USD which looks very illustrative to me. Look at how it’s traded through support in the last few days.

This week we’ve seen weaker than expected inflation in the UK, but better than expected British retail sales; much better Q1 GDP growth data in Japan as well as better than forecast machinery orders data also in Japan. Even consumer confidence in the US is improving relative to previous data. You have to say the good news has outweighed the bad, and it’s pertinent because of what the last FOMC minutes reveal. It is clear that policy makers will be prepared to take hawkish action in June if the data supports it. Ok so most of the data I’ve mentioned hasn’t been for the US, and it’s reasonable to assume that the Fed will be far more focussed on their domestic economy. But let’s not forget that the externalities have been a concern for the FOMC in recent meetings. It does look like that’s going to be less of a concern now, and the US economy has been pretty solid for quite some time. The bottom line is that I think stronger US data will give the dollar a boost between now and the next FOMC meeting in June.

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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.

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