Pound under pressure again amid political turmoil
Friday 21 October 2022
The sad debacle of UK politics continues as Truss resigns to make her the shortest serving PM of all time notching up just 44 days in office. Cue a relief rally of sorts for the beleagured Pound but it wasn't long before the reality check set in, as I had been warning. There is no positive way out of this mess and this morning has seen pressure piling on again as the Tory party try and decide on the next cab on the rank, including Boris returning. Yes, really.............. This morning's soggy Retail Sales data brought a reality check on the economic front too.
US Doillar demand still prevailing as USDJPY holds above 150.00 and USDCHF above 1.000 with fragile risk tones as equity markets turn lower again as do oil prices while Gold sits tightly deciding which camp to back.
GBPUSD: A cap in place at 1.1220 now 1.1250 amid the UK political/economic uncertainty and firmer USD to break down through yesterday's lows of 1.1170 this morning to post 1.1147. I remain a rally seller.I still can't see any good news to be had from the current fallout. EURGBP: Finding support at 0.8680-00 in yesterday's post resignation retreat and now up through 0.8750 to post 0.8770 as I type amid the general GBP supply. I still expect some two-way business with the Eurozone facing issues of its own but the UK definitely still the main focus. GBPJPY: 168.00 support bck in play after failing above 169.50 then 168.75 on the general GBP retreat and some softer-risk JPY demand .
EURUSD: Support at 0.9760 still after capping around 0.9840 then 0.9800. Cross flows, risk, Ukraine and ECB conjecture all in the frame still as well as USD flows. Decent option interest today too. USDJPY: Still marching ever-higher to 150.80 this morning. Intervention threat still real but underpinned by yield differential and that's not changing anytime soon. EURJPY: Now capping into 147.50 but holding 146.50 again. JPY the driver still overall.USDCHF: Still climbing higher amid the general USD demand with support building now at 1.0050 as EURCHF remains underpinned for the moment with SNB never far away. EURCHF: Holding the old resistance of 0.9820-30 still with seemingly some SNB smoothing and EUR dip demand but rally sellers still poised.
AUDUSD: Retreating to 0.6250 again amid the renewed USD demand as I type after capping around 0.6350 yesterday.NZDUSD holding 0.5640 in latest retreat after sellers eventually prevailed at 0.5740. USDCAD: Holding 1.3650 this time and a decent climb to 1.3825 this morning amid general USD demand and oil prices retreating. Variable CADJPY flows still impacting too.
The mighty Shrimpers of Southend return to the Hallowed Hall tomorrow to take on lowly Scunthorpe is what has to be must-win game if we're to have serious promotion hopes despite the sad debacle off it.
Let's continue to be careful out there.
Interbank rates: 08.57 BST