Risk Appetite Drives Shares And Sterling Higher

Sterling has been sniffing around the $1.50 mark as Barclays gave shares another boost. But why on earth is the Euro doing so well?

The best thing I did this morning was to switch my screens off and go to the gym. My take on the weekend press was that UK banks and property companies would drag the market lower. On the currency front I reckoned that expectations of a mega-gloomy inflation report from the MPC on Wednesday, and rising estimates for the cost of a bad bankers bonus protection scheme might take the gloss off Sterling’s rally.

And in early trade both of these looked reasonable bets; the pre-open in FTSE was lower, and both EUR/USD and GBP/USD pushed below their daily pivot points. But to me this seemed like an early Monday morning fake, and after watching the screens for 90 minutes I decided on some exercise. Of course when I returned around mid-morning GBP/USD had resumed its recent trend, consolidating above $1.48; Sterling had also broken below £0.87 against the Euro, allowing me to close Friday’s short bet for +30 pips. I’ve just re-opened a token £1 short at £0.8732; the reason for the small size is because I’m not sure why the Euro’s doing so well today, so I’ve restricted myself to a small bet for the time being.

The two main themes have continued along last week’s merry path, with my short FTSE bet not looking good, but my long bet on GBPUSD notching up further profits. And on a smaller scale my bank shorts continue to work against me.

I closed another £1 of my GBP/USD long bet this morning. I was a bit too keen, accepting a bid of $1.4872, but I’m not sure if we’re entering the end-game for now. Sure, there’s no reason why the move should stop at $1.50, but I’ve stayed in this trade quite a while for me; my last sale was over 200-pips lower so what the hell. I’ve now got £1 remaining, protected by a stop at $1.4680 (again, just below today’s lows).

I need to try and keep an open mind on equities as, once again, I’m now running a fundamental view, rather than a trade based on technical analysis. Charts on the major equity markets are started to kick-up buy signals and even if I don’t trust the market I don’t want to be another 200 points offside and still singing the same song.

Hey, wasn’t the rugby great over the weekend. Wales look hot, but the best game was the Ireland, France humdinger. And what a try; a determined burst through the middle, a neat little sidestep and crashing over the try line-just like any good number 8, nice one Jamie Heaslip.

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