The pound has a “rangebound” day yesterday as everything remained fairly quiet in the UK and Europe. Across the waters, however, heightened tensions between North and South Korea and China and India came to a head, sparking fears of all-out war. With Brexit talks on hold once again and no new events in the calendar, the pound is likely to move out of its “recent tight range”.
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The pound is currently trading at a rate of 1.1151 according to Bloomberg at the time of writing.
This is just below yesterday’s trading rate which was 1.1173.
Despite the pound clawing back over that 1.11 handle, it’s struggling to hit that 1.12 handle.
Michael Brown, currency expert at Caxton FX spoke to Express.co.uk to share his exclusive insight on the current exchange rate.
He said: “It was another rather rangebound day for the pound yesterday against the euro, with the 1.12 handle continuing to prove stiff resistance to the upside, and the pair lacking any fresh impetus to move out of the tight recent range.
“That impetus is unlikely to come today, with a rather sparse calendar of events on both sides of the Channel.”
Chris Beauchamp, Chief Market Analyst at IG, discussed the Fed’s latest action.
He said: “In mid-morning trading yesterday, the FTSE 100 is up 138 points, as markets rally in the wake of central bank moves.
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“What seemed like a significant turn lower for equities has turned into another bounce, with the Fed and BoJ actions overnight providing the catalyst for the revival in risk appetite.
“While the timing of the Fed’s moves will be viewed as somewhat suspect, given that it comes just as the Vix spikes and equities take a dive, the reality is that activist central banks are a feature, not a bug, and will remain the driving force for markets thanks to the boost to liquidity and confidence that these provide.
“When, as now, economic and corporate data is so dire, then it is up to central banks to step in to bridge the gap in economic activity.
“Equity rallies are a side effect, and not the chief object, of these central bank moves, but the mantra ‘do not fight the Fed’ is still as powerful as it ever was.”
Mr Beauchamp also revealed the firm that is at the top of investors’ watch lists.
He added: “Ashtead Group is this morning’s big winner, after it left its dividend unchanged following a fairly strong set of Q4 results.
“While recent performance has been mixed, the firm will be a key beneficiary of a sustained recovery in activity in the US, although a rise in virus cases will certainly provide a cause for concern in the near term.
“But as one of the big winners of the last few years, Ashtead should remain near the top of UK investor watch lists.”
Fears of a second wave have also recently dictated investor sentiment.
A sudden spike in cases in Beijing has seen the city almost completely shutdown once again.
Meanwhile, the US case rate is still continuing to rise.
So far, the country has had over 2.2million cases and almost 120,000 deaths.
However, despite the high case rate, almost a million people have recovered.
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