A Sterling performance by GBP but more of a YEN for the YEN

Posted on June 27, 2010 by larry | No Comments

There was a mixed bag of performances in forex markets last week.
Equity markets failed to sustain any sort of rally and indeed lost ground on the week.This prompted the best performance from the Japanese Yen hitting a low of 89.20 against the US Dollar
Elsewhere the usual market scenario on Risk Aversion did not quite play out as usual.The US Dollar was generally weaker over the week with the exception of commodity currencies. Sterling which I tipped last week did perform exceptionally well considering the equity markets. It did indeed manage a break eventually through 1.50 closing at 1.5065 GBP/USD and reaching levels above 1.22 against the EURO.The UK budget was well received by markets and commentators as the UK seems to be making big efforts to address its deficit problems.
Early in the week things had looked a little better as the Peoples Bank of China pointed to more flexibility on the Chinese Currency. However, reactions to this soon evaporated and it appears little more than a peace offering ahead of the G20 meeting.
I suspect it will again be all eyes on equity markets this week. Technically it looks a decidedly dodgy for markets so we can expect generally the usual currency plays. That said the US Dollar as I mentioned was somewhat detached from the norm last week so this needs to be watched.
There is a wealth of statistics out next week all capable of generating some reaction. Far to many to go into when I am sunning myself on a beach anyway.
On balance though I do remain concerned about the equity markets in the short term and we could at least see another 4 or 5 % off markets if this weeks figures prove negative with the customary knee jerk for forex markets
As for the world cup surely the markets are pointing to an English victory over the Germans……….please……..and does anyone know who trades the Ghana Cedi .But my tip for the week is Chile, have you seen their stock markets performance…watch out Brazil

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