Market Report for 20/07/2018


EURUSD
$
3 MONTH TREND –
Resistance $
Support $
GBPUSD
$
3 MONTH TREND –
Resistance $
Support $
GBPEUR
3 MONTH TREND –
Resistance €
Support €
GBPUSD GBPCHF
GBPEUR GBPAED
GBPJPY GBPSEK
GBPAUD GBPDKK
GBPNZD GBPCZK
GBPSGD GBPHKD
GBPCAD GBPTHB
EURUSD GBPZAR
GBPSAR GBPNOK
The prices shown are “mid-market” exchange rates and are not the rates that you will be offered by Cornhill. Your rate will be determined by the amount of currency that you are buying. Please speak with your dealer for a live quotation.
Soft retail sales cause more pain for the pound…
A surprisingly weak UK retail sales report created more agony for sterling bulls. The above average temperatures and World Cup kept shoppers away from clothing and department stores. On the plus side – June was a positive month for food stores who had their best quarter since 2001. Yesterday’s softer number crossed the news wires at -0.5% after forecasts were for a release of +0.2% from May’s strong number.

Sterling immediately plunged lower, breaking key psychological support at the $1.30 level and also short-term support seen at €1.12 against the euro. The political tumult mixed with weakening of the economic situation is causing a real headache for the pound. The last 3 months has seen the GBPUSD rate fall from the dizzy heights of $1.43 all the way down to the $1.29s yesterday. This report warned of the potential for further losses against the greenback at the end of May. At the time we asked the question – how much further could the rate go? Revisiting this question again, the answer would be the same. There’s a lot out there which could create an environment where the pound revisits its post-Brexit lows. The situation within the government is one of huge concern, mixed with the fact that the new Secretary of State for Exiting the EU will soon be dishing out documents to businesses detailing how they should begin to prepare for a ‘no deal’ scenario and I’m sure you’ll all agree – the situation is far from stable. Some may argue that the Bank of England will be raising rates soon. However, if it does happen, it will likely be a ‘one and done’ scenario which would still leave a difference of 1.25% interest in favour of the US dollar.

There’s always a chance that a positive development occurs and shifts sentiment in favour of the pound. Waiting to see if this happens means one’s simply relying on hope. At the moment there is one fact we can all agree on – uncertainty is rife across the UK political and Brexit scene. While significant uncertainty remains, it’s likely the path for the pound is lower. Have a good weekend.

EURUSD EURUSD
GBPUSD GBPUSD
GBPEUR GBPEUR

written by Vivek Savani
0203 409 5368

The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. Cornhill International Payments Limited is a limited company registered in England and Wales. Registered number:6260585. Registered office: 4th Floor, 18 St Swithins Lane, London, EC4N 8AD. Cornhill International Payments Ltd is authorised by the Financial Conduct Authority for the provision of payment services under the Payment Services Regulations 2017 (Reference number: 504494) and supervised by the Financial Conduct Authority under the Money Laundering Regulations 2017.

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