The story of the night has been the diverging paths of the USD

Chris Weston

Pepperstone

The story of the night has been the diverging paths of the USD. On one hand the USD lost ground against the EUR and GBP, but rallied with strength against the CAD and AUD, as well as certain emerging market currencies. GBP/USD broke out above the recent high of 1.6605 and the underlying strength is there for all to see. Picking tops is ill advised, that is until we see signs of exhaustion, but my feeling is this pair heads to 1.6700 in the short-term. Many investment banks will look at the difference between UK two-year gilts and US two-year treasuries and the wider the yield spread the more compelling it is to hold a currency. Last night we saw the spread blow out to eighteen basis points, which shows that the move higher in GBP was supported by favouring economics and therefore fundamentals.


1 topic

Chris Weston
Chris Weston
Head of Research
Pepperstone

Highly accomplished financial markets professional, with experience at a number of top-tier global institutions on both the buy and sell-side. A natural communicator with a strong ability to analyse macro-economic trends, capital flows and market...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment