Excel Currencies Blog

It's hard to find anyone reputable that is betting on the £-$ to improve in the near-term. Whilst nothing is guaranteed in this market of course, it's hard to ignore that it's more likely than not, that cable will continue its downward spiral. Over 10-cents has incredibly already been lost in under 3-months and it looks like the path will continue in the month's ahead.

Most of our customers with a large $ exposure have hedged their position already, taking risk off the table for the next 3-6 months with a forward contract in place. If you are yet to follow, this may be one of the last times we see the 'mid-market rate' over 1.20 for a while, so suggest you at least consider hedging something for the near-term to split your risk.

£-€ isn't all doom and gloom (yet), but the tide may be shifting on this pair after losing 2-cents in 5-weeks. September was 'rough' for the Pound and a 'hangover' looks set for this month. A key factor in what happens next here is whether the EU & UK economically diverge or not. Both are struggling for growth, with stagflation and recession fears firmly back on the table.

Over a 12-month period, GBP v USD remains somewhat surprisingly 7% up and so in that context is favourable. Whereas GBP v EUR is level over the same period. This shows us that there is easily more room for cable to fall and the Pound could remain range-bound against the Euro. King Dollar is calling the shots at the moment and this tends to be bad news for Sterling..