020 7898 0500Several days of low volatility (the daily range on GBPUSD had been below 1-cent per day since Mar 28) came to an abrupt end on Thursday as trade tensions between the US and China put wind in the dollar’s sails. Sterling had previously found support at the 20-day moving average, but broke lower around as the US markets opened. It’s a different story against the euro, though, as the dollar gained against both the pound and the single-currency, GBPEUR hardly moved as we would expect.
Worse-than expected services sector data from the UK set the tone for Thursday’s session, with the dip in output growth being blamed on the recent snowfall. The British economy is thought to have grown at 0.3% in the first quarter of 2018, a slowdown which could extend the Band of England’s loose monetary policy. The Smart trading team still see optimism for the pound’s longer-term outlook, but vulnerabilities to Brexit uncertainty and other political events remain. Regardless of your market view, you should ensure that your business is effectively insulated against the unpredictable nature of the FX market. Smart’s risk management solutions desk have a number of unique analysis tools and market-leading hedging tools available for your business – call us today!
