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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
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
  • Crude oil prices collapsed on Monday despite an OPEC+ breakthrough, driven by Covid-induced demand woes. Meanwhile, Gold is at odds with a stronger US Dollar and falling Treasury yields. Get your #crudeoil market update from @FxWestwater here:https://t.co/H1vmag8d1k https://t.co/1zuPdKUmyE
  • AUD/USD is likely to face increased volatility over the coming days as it faces a batch of key event risks going into the end of July. Get your Australian Dollar forecast from @DavidJSong here: https://t.co/qFpg0DCxxL https://t.co/quQxg4WBy3
  • The US Dollar outlook against ASEAN currencies like the Singapore Dollar, Thai Baht, Indonesian Rupiah and Philippine Peso remains bullish amid capital outflows risks as Covid cases swell. Get your market update from @ddubrovskyFX here:https://t.co/vRUVxvQP8o https://t.co/cUEkW9BfIP
  • Is investing in your favorite brand or buying its products the better financial move? Read the article for a breakdown. https://t.co/iWOlDAK8cD https://t.co/0uS5VvWj12
  • Crude oil prices collapsed on Monday despite an OPEC+ breakthrough, driven by Covid-induced demand woes. Meanwhile, Gold is at odds with a stronger US Dollar and falling Treasury yields. Get your #crudeoil market update from @FxWestwater here:https://t.co/H1vmag8d1k https://t.co/PW5pCw9dKR
  • The Japanese Yen has been making a comeback, but it may soon resume its decline against the US Dollar as USD/JPY consolidates within a bullish Falling Wedge. Watch for a breakout. Get your market update from @ddubrovskyFX here:https://t.co/zxRWoNR4lS https://t.co/bXTx0TSRmU
  • BTC/USD treading water sideways, 28600 the big level to watch. ETH/USD working on forming a nice-looking descending wedge. Get your market update from @PaulRobinsonFX here:https://t.co/H1qOV4FR1P https://t.co/tjutUl7Nt7
  • Gold hasn’t been very active the past few sessions, but that could change next week and provide a stronger trading bias. Get your weekly gold technical forecast from @PaulRobinsonFX here: https://t.co/HaEe3i4Sug https://t.co/LsARS2mnFI
  • Market uncertainty sees GBP pairs break out of their ranges. Get your weekly GBP forecast from @HathornSabin here: https://t.co/IRO7a6Jv8J https://t.co/4LxWz7sOVF
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.01% 🇪🇺EUR: 0.01% 🇨🇦CAD: -0.03% 🇬🇧GBP: -0.16% 🇦🇺AUD: -0.21% 🇯🇵JPY: -0.36% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/AXKeEsin95
GBP: Starting to Behave Like a 'Risk-On' Currency

GBP: Starting to Behave Like a 'Risk-On' Currency

Martin Essex, MSTA, Analyst
GBP: Starting to Behave Like a 'Risk-On' Currency

Talking Points:

  • The British Pound is trading more like a ‘risk-on’ currency such as the Australian Dollar than a haven currency such as the Japanese Yen and the Swiss Franc.
  • This means that unless the tension eases between the US and North Korea it could well lose ground.
  • There is also plenty of risk from a batch of important UK data releases while Brexit remains on the back burner.

Fundamental Forecast for GBP Bearish

Looking for a longer-term forecast for GBP? Check out our new Trading Guides: they’re free and have been updated for the third quarter of 2017

The British Pound is often seen, like the US Dollar and the Euro, as neither a safe-haven currency to be bought when investors are nervous nor a ‘risk-on’ currency to be acquired when their risk appetite increases. However, this broad generalization, like most, needs to be questioned.

The US Dollar, for example, is sometimes used as a haven. The British Pound, for now at least, is trading like a currency investors will shun if the dispute between North Korea and the US continues to dominate the markets. Against the Australian Dollar, for example, it barely budged last week even though the AUD is seen as a typical ‘risk-on’ currency.

Chart: GBP/AUD One-Hour Timeframe (August 7 to August 11, 2017)

GBP: Starting to Behave Like a 'Risk-On' Currency

Chart by IG

By contrast, it weakened against both the Swiss Franc and the Japanese Yen; the two currency bolt-holes of choice, along with gold, US Treasuries and German Bunds.

Chart: GBP/JPY One-Hour Timeframe (August 7 to August 11, 2017)

GBP: Starting to Behave Like a 'Risk-On' Currency

Chart by IG

The clear implication is that if you think the dominant market theme in the current week will continue to be the megaphone diplomacy between Donald Trump and Kim Jong-un, the British Pound could fare badly. Moreover, it’s a big week for UK data and any more signs of economic weakness could further undermine it by pushing a tightening of monetary policy even further into the future.

Economists are looking for headline inflation to increase only modestly in July to 2.7% year/year from 2.6% and for retail sales growth to have slowed markedly, while the unemployment rate and wages growth remain stable. If inflation comes in lower than expected, or the labor-market figures are disappointing, the Pound could suffer accordingly.

As for Brexit, little is happening right now as many UK politicians remain on holiday. Note, though, that Michael Saunders, one of the two hawks on the Bank of England’s monetary policy committee currently voting for a rate rise, was reported Friday as saying that the UK’s exit from the EU meant the economy would probably grow more slowly in the coming years than it would otherwise have done.

Against this background, the risks for the Pound seem more to the downside than the upside.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

If you’re interested in the influence of sentiment on market trading, listen in to my webinar at 1000 GMT Monday

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

DISCLOSURES