Interesting article reported in the Daily Express today regarding GBP by Siobhan McFadyen
According to experts the sterling-dollar conversion is on the move strongly again thanks to UK housing market data which showed the market was unexpectedly resilient in October.
The pound also benefitted from belief that Donald Trump will fast track a trade deal amid rumours the European Central Bank is planning to print more Euros as investors weigh up currency risks.
Senior analyst at Danske Bank, Mikael Milhoj, notes the key resistance clearing in GBP/USD:
“While it is too early to call the Trump win a clear game changer for GBP, we think GBP momentum could develop further in the near term.”
“As the important resistance level of 1.2480 in GBP/USD has been cleared, technically there should be room for a test of 1.30.”
“The market is very short GBP, according to IMM, suggesting substantial correction potential.”
The pound is also up against the euro one cent to €1.161 with 1 euro now worth 86.1p.
Tony Cross, analyst at TopTradr says increased instability in Europe is adding to the pound’s strength.
He said: “It’s starting from a low base given the beating the currency took, both from the shock Brexit vote and the flash crash just over a month ago, but this is increasingly looking as if it’s been overdone.
“Critically there’s growing concern that we’ll see a rising tide of nationalism across continental Europe, with French elections in the new year a real cause for concern, pushing EUR/GBP down to below 0.8700 for the first time since late September.”
Away from the Forex markets two days of relative calm have been hit by a storm this morning as investors begin to get spooked over the Trump presidency one day after he visited the White House for the first time.
In London, the FTSE 100 has dropped 26 points in early trading, to 6801, a significant drop which could be linked listed firms exposed to Asian markets.
Standard Chartered has dropped almost 5 per cent while in HSBC is also down this morning at £624.60 0.70 (0.11%).
Colin Lawson, founder and partner of Equilibrium Asset Management said: “Donald Trump’s outspoken nature is usually famed for causing controversy and uncertainty – however for investors that have paid close attention to the campaign – it now provides a window to future policy.