News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here:
  • The Japanese Yen is eyeing the upcoming Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment. Get your weekly $JPY forecast from @FxWestwater here:
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here:
  • Crude and Brent oil are on track to extend higher as Gulf Coast supply disruptions and a positive OPEC report bolster sentiment. Uranium is on a massive surge, aided by the famous Wall Street Bets group. Get your market update from @FxWestwater here:
  • RT @michaeljburry: Read thread.
  • The Australian Dollar has retraced from August lows when looking at AUD/JPY and AUD/CAD. However, the AUD/NZD downtrend is intact, will a reversal there appear as well? Find out:
  • The S&P 500, Dow Jones and DAX 30 could be at risk of falling as retail traders continue increasing their upside exposure in these indices. What are the key technical levels to watch for? Find out from @ddubrovskyFX here:
  • The US Dollar continues to hold its ground against most ASEAN currencies as recent downtrends lose momentum. What is the road ahead for USD/SGD, USD/THB, USD/PHP and USD/IDR? Find out from @ddubrovskyFX here:
  • The Canadian Dollar has been caught in broad ranges against the Euro and the US Dollar, but can the upside bias in USD/CAD and EUR/CAD prolong? Find out here:
  • Want to hear my thoughts on the US Dollar? Check out yesterday's recording with #AuzBiz hosted by @KaraOrdway on 'The Trade' We discussed a #USD index, Treasury yields, $USDJPY, $AUDUSD and $NZDUSD
GBP/USD Driving Equities and Volatility, Likely to Persist

GBP/USD Driving Equities and Volatility, Likely to Persist

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- BOE's ILTR operation reveals rising funding stresses in markets.

- Markets likely to remain focused on British Pound for foreseeable future.

- FX volatility is set to remain high - it's the right time to review risk management principles to protect your capital.

Equity markets around the globe are taking a breather today, reverting some of the steep losses accumulated in the wake of the historic Brexit vote. Look no further than the stability in GBP/USD today (forming an inside day after a record-setting two days of losses) as the main catalyst. Correlation is not causation, but we know who is in the driver's seat when it comes to volatility and equities (charts below).

Chart 1: GBP/USD versus VIX Daily Chart (2014-2016)

GBP/USD Driving Equities and Volatility, Likely to Persist

Chart 2: GBP/USD versus S&P 500 Daily Chart (2014-2016)

GBP/USD Driving Equities and Volatility, Likely to Persist

It's no leap to suggest that the British Pound - the Brexit vote - is the driver behind the swell in volatility and the turn lower in equity markets. The jump in volatility is particularly disconcerting, as historically, when the correlation between the S&P 500 and the VIX moves closer to -1, it means that markets are in a heightened state of fear (chart below). Such events are playing out now.

Chart 3: S&P 500 versus VIX Daily Chart (2014-2016)

GBP/USD Driving Equities and Volatility, Likely to Persist

The question is, will heightened volatility stick around? It seems likely. Front and center, the lack of political cohesion in the UK right now, and the subsequent consequences, leave the future as cloudy as ever. Article 50, to trigger the beginning of the UK's two-year negotiating window to leave the EU, won't be triggered until a new Tory leader is chosen in three months' time when Dave Cameron steps down. Whether or not the new Tory leader survives a vote of confidence is another story; a general election could be on the table next year, which in and of itself would be a referendum on the referendum!

Markets don't like uncertainty, but what they don't like more is a wide variance in potential outcomes - that's exactly what this Brexit vote poses. The state and structure of the UK's relationship in the EU won't be clear for a long-while, and businesses simply can't afford to wait that long. Markets may be calmer today, but a lack of political clarity in the UK will weigh on the British Pound, which now has implications for risk markets globally.

Read more: Realization of Brexit is a Potential Nightmare for the Euro

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

FX volatility is set to remain high with the UK voting to leave the EU - it's the right time to review risk management principles to protect your capital.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.