Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Pound VS Dollar Currency Analysis

Currencies / British Pound May 29, 2007 - 06:47 PM GMT

By: Submissions

Currencies What happened ? We have had an interest rate rise and we have seen an increasing backing for another rise sometime soon.

I am surprised that this has not been bullish for the pound

We have also seen some really benign inflation data coming out in America which would be dollar-negative, so why hasn't there been more pressure on dollar

IG Index is offering a binary bet of the pound hitting the $2 mark again this year, with a spread of 80-85 points. In other words, the bookies think there is an 85 percent chance of it happening.

However, Hughes points out that the psychological element of the $2 pound has been and gone.

We have had the 15-year highs so what we are seeing now with the pound is a bit of profit-taking from our clients he adds.

According to Michael Wright, director of the fixed-odds bookies BetOnMarkets, a lot of ink was wasted covering the £/$ exchange rate (otherwise known as cable) when it ran past the $2 mark early in April.

Having two dollars to the pound is exciting for shoppers, but the level was more of a psychological barrier and had little if any technical resistance surrounding it he says.

Once the bulls got within a close enough distance, it is almost as though fundamental and technical analysis was thrown by the wayside, in exchange for the dash to the two-dollar-to-the-pound finish line

So what has cable done since breaching that mark? The pound has been in retrace mode, having given up a nice chunk of its run-up.


This is unlike its counterpart, the £/$ which is trading still within sight of it's all-time high.

Until fundamentals catch up with April's run up, it is likely that cable will remain in range mode for the time being Wright adds.

Also, with summer approaching, it is more likely that another push will not come for a couple of months.

An added bonus is that there are no US interest rate decisions for the next four weeks, which may take away some of the nasty surprises

So does no movement mean no profit? Not necessarily so, Wright explains.

BetOnMarkets is offering Barrier Range or Expiry Range trades to take advantage of the market not moving much.

With an expiry range trade, you can win if your trade is between pre-set triggers at that time of trade maturity.

It can trade anywhere before it, but as long as it's between two points you set on expiry, you win.

For example, you can set an expiry trade on the £/$ rate closing between $2.04 or $1.95 over the next 30 days. It might trade higher but as long as it closes below $2.04 and above $1.95, you win.

In a barrier range trade, you win if cable doesn't touch your levels at all during the term of trade.

It's somewhat more risky, because you need the cable rates to avoid touching both of your levels for you to win your bet and not merely close between them.

However, it returns are set higher for example you can set a trade on the £/$ rate not touching $2.05 or $1.91 over the next 30 days.

If the next few weeks are as dull as predicted, this could be profitable way to make things interesting Wright concludes.

By: Joanna Frendo

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in