Good to see Cable back over 1.50....

inspector_monkfish

...but will it last?

---

08:50 05May09 GBP/USD: Sterling Rally Stalling After Strong 4-Day Run

Headlines into Tuesday include a CBI warning that small to medium sized firms have seen orders decline at the fastest pave in 20-years but company optimism rose last month with the Stoy Hayward index rising to 91.2 from 89.9 in January.

Sterling extended its impressive bull run to 1.5064, the fifth straight day of gains, in early Tuesday trade. However, profits were booked as a large EUR/GBP sell order out of Germany was completed. Cable has slipped to 1.5015-20 and looks set for a drop back under 1.50. Offers are touted between 1.5070 and 1.5100 and on the buy side the interest is reportedly camped down at 1.4980-90.

inspector_monkfish

up to 1.5110 now....

purch

How much is USD weakness, rather than GBP strength ??

worldtraveller

inspector_monkfish wrote: »

...but will it last?

IMHO, I don't believe so. Nor do I hope so, since I'm paid in US$.

I think that the shocking deterioration in our economy and tax take will push debt levels way, way beyond what the Goverment are predicting. The amount of quantitative easing required will need to increase beyond forecasted levels. It's already a big concern in the gilts market as the government said that it would issue a record £220 billion (some say as high as £260 billion!) of gilts in the current financial year alone, which is 50% more than last year. I seriously wonder how long it will be before the UK loses its AAA credit status, which would mean a disaster for gilts. If that rating drops, the cost of Government borrowing would shoot up even further, adding to debt even further and hitting Sterling badly.

OK, the U.S. has similar issues of course, but I think that their economy will recover quicker than the UK.

inspector_monkfish

purch wrote: »

How much is USD weakness, rather than GBP strength ??

seems like a bit of both

inspector_monkfish

10:07 05May09 GBP/USD: Still Looking Good As Bids Turn Price Sharply Higher

[09:07 GBP/USD: Still Looking Good As Bids Turn Price Sharply Higher] London,
May 5.

We had seen risk of a drop to 1.4970-80 before another concerted push
higher but bids stacked up ahead of the 1.5000 level have pushed the Pound
through the 1.5070-80 offers and onto a 1.5110-12 high.

A better than expected return for the April construction PMI, 38.1 vs 30.9 in March might have helped Sterling but we are hearing of good sized order flow out of Europe, which looks to have underpinned the Pound" performance.

With Cable trading at levels not seen since January a new 2009 high looks to
be on the cards. The 8th January high at 1.5372 will serve as a target but for this session we expect profit taking to limit gains to the mid-1.51"s. We still see risk of a deeper pullback below 1.50 but for now the trend is up and cross action also supports Cable gains.

Alan_M_2

I'm quite interested in the FOREX market and would like some reading matter on it. (i.e FOREX for Dummies etc...)

Any suggestions from those involved?

Also out of curiosity, why use the word CABLE?

purch

Also out of curiosity, why use the word CABLE?

Because the first FX Trading was done via Cable/Telex Machine between Banks in New York and London.

inspector_monkfish

purch wrote: »

How much is USD weakness, rather than GBP strength ??

47% usd weakness
53% gbp strength

;)

inspector_monkfish

Alan_M wrote: »

I'm quite interested in the FOREX market and would like some reading matter on it. (i.e FOREX for Dummies etc...)

Any suggestions from those involved?

Also out of curiosity, why use the word CABLE?

http://en.wikipedia.org/wiki/Cable_(foreign_exchange)

inspector_monkfish

11:46 05May09 IGM-FX: Gbp bulls eye next topside targets

11:45 - [GBP] has been the undoubted top performer in Europe so far.

UK clearer and German bank demand has been very prominent and topside stops have been tripped pretty much across the board. The pivot for Cable was 1.5065/70 and a host of stops were tripped on a break above.

Models were seen keen buyers after, the move to the 1.5112 16-week best also helped along by a much firmer than expected UK Apr construction PMI report at 38.1 vs a 31.9 forecast and 30.9 last.

Ahead of all things US and the next ISM, bulls will be eyeing a sustained 1.5065/70 breach for even greater topside towards 1.5250 and 1.5370/75 areas.