Major currencies trade in tight range as investors hold fire
Over the past week all the major currency crosses have held within a tight range as investors and analysts alike wait on some sort of developments to many major events across the world. Over the past week’s trading GBP/EUR has traded within a scale of 70 pips and GBP/USD has also been relatively tight only fluctuating by 0.9 of a percent.
The main reason for this lack of activity is the fact there hasn’t been a lot to entice people into taking different positions when it comes to currencies. A lack of Brexit developments, which are on hold until the outcome of the election, no breakthrough in US-China trade talks no central banks changing their stance on monetary policy and a lack of influential data means investors don’t want to move until there is something to act on.
“Headline fatigue has set in,” said Ray Attrill, National Australia Bank’s head of FX strategy.
“With the constant barrage of seemingly contradictory stuff, the market’s given up trying to second-guess…seeing is believing, and we’ll trade it once we know what’s happening.”
With some of these major events coming to a head in the next few weeks you can expect the volatility levels in the markets begin to increase. All opinion polls will be closely scrutinised and any change in the lead will effect the Pound. There are also rumours that negotiations between the US and China will rumble into next year so USD crosses will still be affected.
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