Market Brief: GBP/EUR at 8 year low
22 Aug 2017
Monday began in a summer lull with a lack of data releases meaning traders are preparing for Thursday, with little position taking beforehand.
| Latest rates | Today's data release | ||||||
|---|---|---|---|---|---|---|---|
| GBP/USD | GBP/EUR | GBP/AUD | GBP/CAD | GBP/CHF | 09:30 | UK public sector finances |
|
| 1.2875 | 1.0917 | 1.6214 | 1.6167 | 1.2420 | 10:00 | EU ZEW | |
| GBP/JPY | GBP/HKD | GBP/ZAR | EUR/USD | EUR/GBP | 15:00 | US FHFA house price index | |
| 140.72 | 10.0739 | 16.9213 | 1.1792 | 0.9159 | |||
| Investec currency forecasts as at 27 July 2017 | Key levels | ||||||
| Q3 '17 | Q4 '17 | Q1 '18 | Q2 '18 | Support | Resistance | ||
| GBP/USD |
1.29 | 1.30 | 1.30 | 1.31 | 1.2818 | 1.2927 | |
| GBP/EUR | 1.13 | 1.14 | 1.13 | 1.13 | 1.0625 | 1.0994 | |
Market overview
Monday began in a summer lull with a lack of data releases meaning traders are preparing for Thursday, with little position taking beforehand. USD has traded higher overnight; Tokyo-based funds buy dollars amid speculation that the USD will be boosted by comments from central bankers at the Jackson Hole symposium meeting this week.
More importantly, GBP/EUR has moved to the lowest levels since October 2009, even more concerning for GBP sellers is the support levels now resting at 1.0625 leaving a lot of space to the downside. The ECB's Draghi may well be careful in what he says to not cause too much EUR volatility; it is worth noting that EUR has risen as much as 6.5%, as measured by the Bloomberg euro index, since his speech in Portugal in late June. It is widely expected that Draghi's comments will outshine Yellen's at the end of the week.
In the UK today PM Theresa May’s government is dropping its third position paper in two days on how it sees its future relationship with Europe. The government yesterday published position papers on goods on the market and access to official documents to "help give businesses and consumers certainty and confidence" on Britain following Brexit.
More importantly, GBP/EUR has moved to the lowest levels since October 2009, even more concerning for GBP sellers is the support levels now resting at 1.0625 leaving a lot of space to the downside. The ECB's Draghi may well be careful in what he says to not cause too much EUR volatility; it is worth noting that EUR has risen as much as 6.5%, as measured by the Bloomberg euro index, since his speech in Portugal in late June. It is widely expected that Draghi's comments will outshine Yellen's at the end of the week.
In the UK today PM Theresa May’s government is dropping its third position paper in two days on how it sees its future relationship with Europe. The government yesterday published position papers on goods on the market and access to official documents to "help give businesses and consumers certainty and confidence" on Britain following Brexit.