Morning all
Trust that you have had a good Bank Holiday…
USD
Starting with the topic in hand, is it finally America’s turn to show some weakness? Inflation in the US is really starting to ramp up and Jerome Powell (head of the Federal Reserve) has stated he will do “whatever it takes” to bring inflation back to the 2.0% target. This will invariably cause pain in terms of lower growth and higher unemployment. Still in my opinion the Dollar is too big to suffer the same war wounds that the Pound has currently been inflicted with in our current rut and is still very much a safe haven.
GBP
Usual post Bank Holiday blues, opening up 1% lower against EUR and USD. Now that the EUR is officially weaker than the USD all usual psychological barriers associated with GBPUSD and GBPEUR have been thrown out of the window with no lower boundaries associated to how low GBPUSD can go. Some ‘headline catchers’ are suggesting 1.1410 however I feel the levels we are currently trading it are as low as we will witness. It is just isn’t viable for importers or freight forwarders to continue purchasing at these levels.
EUR
Probably the only currency of note doing worse than the Pound! I personally think that it will continue to get worse as Winter approaches in Europe and the Gas supply issues continues to ramp up. Rumours of 0.75% interest rate increase next month. Now the mark has been set it’ll be interesting to see if the Europeans miss, hit or exceed the mark.
Have a good first day back 😊