By Luke Dyson
So far this month we have seen a large amount of intraday volatility with still no clear trend in sight for Sterling against the other major currencies. The current market for GBPEUR has been and still is trapped in its two cent range making it a clear buying opportunity as the rates are holding their strength. These market conditions are excellent for limit order strategies as the rates bounce within this range and allow you to take advantage of the daily volatility and potentially catch the highs of the range.
For GBPUSD this week we have seen the market gain some traction early on with a two cent gain, but this was very short lived with a sudden drop later on in the week. This increased volatility is largely down to Friday’s Jackson’s Hole meeting of central bankers hosted by Federal Reserve chairman Jerome Powell. This is an annual event in which central bankers from across the world discuss long term trends and outlooks for potential future concerns.
If you are a Dollar buyer you should consider taking advantage of current GBPUSD strength as this yearly announcement can have quite an impact on the Dollar, as more certainty and preparation is built for the US.
Regarding Covid and travel restrictions, we saw another update from the UK government last night with seven more countries moving to the green list, but also some negativity with two more moving to the red list as Covid cases continue to rise. The Azores, Canada, Denmark, Finland, Liechtenstein, Lithuania and Switzerland have now moved to the green “safe to travel” list. However Montenegro and Thailand will move to the red list with restrictions starting at 4am on the 30th August.
If you have any up and coming currency requirements and would like to take advantage of the current intraday volatility, please get in touch with your currency consultant and we can help get the best strategy in place for you to ensure you get the best rate possible. Whether this is a spot, limit or forward contract, there will be something we can do to help to limit your currency risk.