I am sure you are all well aware that the markets have been in complete disarray over the last few weeks- with stocks, commodities and currencies all making massive moves in short periods of time. The Fed & the Bank of England have both cut interest rates, with other Central banks expected to follow suit over the coming weeks.
Stock markets rose on Friday following the Fed’s decision to pump 500 Billion Dollars into the market to boost liquidity, and Donald Trump declaring a state of emergency in the U.S shortly after.
The Covid-19 concerns are very high in Europe, with Spain, Italy & France all on lockdown, Switzerland to soon follow- and cases expected to rise in the UK over the next week. It is because of all of this, that I am expecting Sterling to potentially fall further over the next week.
At the time of writing, GBPEUR is at 1.10- and GBPUSD is at 1.23- which is scary, I had clients on Monday morning getting 1.30 on the USD. It just shows you how much the current problems are affecting economies already.
EURUSD has also taken big swings, hitting 1.14 last week, and now dropping to 1.1050 by Friday close.
At this point, the markets are relatively impossible to predict- most money seems to be going into USD, JPY & CHF as safe havens. Gold will also see some strength on the back of this.
Sterling is probably set for a bad week as the virus spreads more- and would potentially get worse when the UK Government eventually decides to lockdown.
Speaking on currencies, please do not panic- if you do not have immediate payments to make, let this play out- and look after yourself and your loved ones, health is always more important than money. When the market settles, that will be the time to look at the payments you need to make.
If you have got immediate payments, I have been working with clients to catch the moments when their currencies spike, so just let me know the levels you are targetting and I will do my best for you.
I hope you are all staying safe and healthy- let’s hope this episode is over quickly- if anything is needed, please don’t hesitate to contact me, if I am not in the office- my personal mobile is always available to you.