Special Feature
Against the euro, the Great British pound also seems to be defying gravity and, in this instance, there are few punters who would bet against the euro making back much ground against GBP due to the continual woes affecting the eurozone and single currency. But, where our clients are expecting the real action when it comes to sterling is in GBP/USD as sellers of cable have been creeping in. There are quite a few bears of sterling against the dollar, but the greatest challenge to their view is that no matter how poor the UK’s fiscal position looks, if the US starts ramping up the stimulus measures again this could easily send the dollar tumbling once more...
“Down under”, the Australian economy continues to boom and the Reserve Bank of Australia had raised interest rates way above those of Western central banks.
Last but not least, the Aussie dollar is another favourite for clients.
It would seem that whatever happens in the currency markets that for the rest of this year there are two major events that could impact them — the euro and the Fed. We will watch and wait to see how things unfold.
Whilst they have gradually been bringing that base rate down in the past year, their currency remains strong against the US greenback. The parity level remains a force to be reckoned with and, for now, those commodity bulls remain in the ascendancy. As with cable above, if the Federal Reserve does get QE3 underway, then this could precipitate another sudden move higher for AUD/USD.
AUD / USD Chart
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46 | www.financial-spread-betting.com | September 2012