Morning all
Hope you have had a good weekend and enjoyed the last of the summer sun, back to the usual format this morning.
GBP
Sharp rise this morning following reports that the UK government will reverse its planned scrapping of the top rate of income tax. It represents a major and humiliating U-turn for Liz Truss, who was insisting as recently as Sunday she was “absolutely committed” to the cut. I hope this is not a sign of things to come – Rishi Sunak for once told the truth when running for PM and stated the tax cuts and energy caps mooted by Liz were unsustainable; and he was right. Anyway enough politics chat for a Monday morning, lets hope this rally continues this week – we are 8% up from last Monday!
EUR
Inflation at 10% – this is going to pile untold pressure on the European Central Bank who are fast running out of options. Given the lack of data out this week it’s hard to see anything other than a 0.75% by the ECB at their meeting on the 27th October. That aside we are off the lows and trading at highs we witness at the beginning of September. Will GBPEUR go higher? Yes. EUR will weaken off as the bad weather approaches and tourism slumps.
USD
GBPUSD making a recovery back to post covid levels – don’t get too excited, it’ll be a long way until we are anywhere near 1.20.
We still need to break through the covid lows at 1.1450 because even contemplating the next leg higher.
Here to help if you want to capitalise on the rally this morning.
Best
1FX