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Profit taking undermines the Pound – where next for GBP/EUR, GBP/USD and GBP/AUD? (Joshua Privett)

Sunday, November 27, 2016 4:45
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Like clockwork speculative trading on Friday has attacked some of the Pound’s heavy gains against the Euro and the Australian Dollar in particular over the past 3 weeks.

After breaching fresh 10 week highs just on Thursday, the Pound was hit on two fronts on Friday.

Firstly, harsh words from the Maltese Prime Minister about the upcoming negotiations with the EU were enough to upset a clearly hypsersensitve market at the moment.

Sterling recouped some of those losses when it was quite clear it was an overreaction to those comments. Though you can’t blame investors for jumping the gun…the last time a few leaders from the Eurozone made comments like that it was the beginning of October and it caused a flash crash on the Pound, with GBP/EUR falling 4 cents as an example.

Following this, the rollercoaster continued for buying Euro and Dollar rates, and the reasoning points to worrying expectations for exchange rates in the latter part of next month.

Profit taking and protective trading will likely see the Pound undercut quite heavily as markets relieve themselves of riskier currencies ahead of the Christmas period when trading winds down. Essentially many traders are not at their desks so will likely buy up ‘safe haven’ currencies such as the Swiss Franc and US Dollar to avoid coming back to work in January to see hard earned profits lost.

The expected mass sell off of Sterling is why companies and individuals are already planning to protect themselves during this period.

A more muted version of this actually happens every Friday as investors sell off their Sterling to protect themselves heading into the weekend when they are not at their desk.

The fact that this continues to happen is why anyone with a buying Euro, US Dollar, or Australian Dollar requirement should be wary of the Christmas period.

If you are planning a currency purchase involving the Pound, it is certainly worth your time contacting me on to order to explore the options open to you to seize any peaks which emerge on GBP/EUR, GBP/AUD and GBP/USD, and to safeguard your transfer from any unexpected turns in global politics and the financial world.

I offer my customers a proactive service to make sure you remain a well informed purchaser and avoid being ‘last to the party’ when attractive levels for buying or selling suddenly emerge. I also work for one of the UK’s leading currency exchange brokerages who provide highly competitive currency exchange rates.

To avoid the inherant risk of the Christmas period, I would remind our regular readers that you can also ‘pre-book’ your currency at today’s rates for a later period to avoid navigating particularly volatile periods when you have a planned currency exchange in 2017.


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