• Pound in focus as BOE cuts rates

    Carney & Co were up early this morning to land a 0.5% base rate cut along with other measures in a Coronavirus pre-emptive strike. A surprise ? Not entirely. Carney had made it clear that some action might be needed and that they wouldn't hesitate to move but the timing of it will have caught a few people out with the latest GDP data out at 09.30 GMT then the much-touted fiscal boost UK Budget being delivered at 11.00 GMT.

    GBPUSD fell sharply to 1.2825 post-BOE rate cut and I duly took some profit on existing shorts but the pair was equally quick to bounce back to 1.2944 as we wait on Carney. EURGBP has rallied to post 0.8848 (GBPEUR down to 1.1300)in the BOE aftermath before also falling back quickly to 0.8740 (GBPEUR up to 1.1442). Markets will be casting an eye on tomorrow's ECB announcement where they are expected to take some action too. GBPJPY plummeted to 134.00 post-BOE but back up to 136.20 before capping as we wait on the presser. BOE and Budget action are not the only games in town for this pair of course as market risk remains fragile.

    We've now had the BOE presser offering little of note and some soggy UK data leaving the Pound still making its mind up. Next cab off the rank is the UK Budget at 12.30 GMT where we expect to see a raft of fiscal stimulus. What impact it may have on the UK economy will leave opinion divided but I remain sceptical.

    Elsewhere fragile trading conditions also prevail in the aftermath of the various flash crashes of Sunday/Monday and we've seen some sharp moves in the past 24 hours across a variety of pairs but mainly JPY-led.

    USDJPY has been down to 103.20 and back up to 105.68 in a series of roller-coaster rides while EURJPY has failed into 119.50 but finding support into 118.00. Amid the JPY volatility we now have tomorrow's ECB meeting/measures in focus and that's helping to put a lid on Euro gains across the board.EURUSD has fallen to 1.1277 on the ECB speculation/firmer USD tones but sticking around 1.1300 as I type with 1bln option expiries in play there today too. USDCHF has been up to 0.9410 as EURUSD fell and with EURCHF holding 1.0575 with the SNB ever poised but sellers still poised.

    AUDUSD continues to see good two-way business if roller-coaster rides are to your liking. Lows posted of 0.6478 makking those 0.6683 highs on Monday a distant memory but finding some support again for the moment. USDCAD has been up to test 1.3800 as oil prices fell again but since retreated to 1.3680 as the jury remains out on both risk and oil price still.

    Fickle Forex markets ever prevailing so be ready to jump on moves with your entry/exit levels and orders as always. Caution advised as ever if you're not sure.

    Lots going on right now, and the foreseeable future, so don't forget that I offer 1-2-1 mentoring if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, that you might need some further help with.

    Have a good day one and all. Let's be careful out there as ever.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 09.47 GMT

    GBPUSD 1.2967

    EURUSD 1.1302

    EURGBP 0.8715

    GBPEUR 1.1472

    GBPAUD 1.9871

    GBPCAD 1.7748

    GBPJPY 136.41

    GBPZAR 20.8150

    GBPHKD 10.0324

    USDJPY 105.17

    USDZAR 16.0952

    EURJPY 118.88

    EURCHF 1.0596

    EURHKD 8.7452

    AUDUSD 0.6524

    USDCAD 1.3699

    USDCHF 0.9368

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