Good morning

  High Low     High Low
EUR/USD 1.0968 1.0902   USD/ZAR 15.2965 15.1020
GBP/USD 1.4912 1.4862 GBP/ZAR 22.75 22.45
EUR/GBP 0.7372 0.7329 USD/RUB 70.34 67.85
GBP/EUR 1.3644 1.3565 USD/ILS 3.9000 3.8790
USD/JPY 121.00 120.30 S&P 500 2066 2057
GBP/CHF 1.4761 1.4659 Oil (Brent) 38.04 37.47
GBP/AUD 2.0587 2.0439 Gold 1074.0 1069.0

Quiet open on the FX markets in Europe ahead of the long Xmas weekend.

No change in my sentiment from yesterday. I am looking for the USD to resume normal operations in the coming days/weeks as traders return from their holidays and put on positions. As long as the US economy continues to grow and expand the likelihood of further US rate hikes will be a matter of how soon rather than when. That will give the USD a further boost and see the greenback finally break PARITY (EURUSD 1.00/1.00). 

The Pound though will fair somewhat differently given the “strength” of the UK economy (despite yesterday’s disappointing Q3 GDP numbers). While UK rate hikes have been pushed forward to the latter part of 2016, should things turn around and we see growth in GDP, wages and CPI – that decision to raise could very well be brought forward. The EU referendum is a thorn, but its too far away for now to cause real damage to the GBP. Further down the line I see the GBP staying in the 1.40-1.52 range for 2016 while vs the EUR I believe the GBP will break 0.7000 (1.4285) and trade sub this level for the year.

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