Monday, 26 June 2017
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Weekly Financial Update

Not really too much to report from the markets in the last week or so. Again, the Pound looked weak but in fact held up pretty well against the Euro and USD. Much press talk was about the Brexit negotiations going on in Brussels. Naturally we are going to hear many stories and assumptions regarding these, and the uncertainty can only add to volatility.

The pound has definitely held up well since the election. However, it really still favors the weak side; although we really do not feel it will fall in a straight line. We even broke above 1.14 against the Euro last week. This seemed to spur the market on talking the Pound up. However, it was sold off with a vengeance again down to the mid 1.13s.

It's defiantly holding against the USD also. We are now above 1.27, but although the Pound is not racing away, it is slowly ticking higher against the USD. The EUR/USD has also held steady and has again moved up against the USD causing STG/EUR to stay pretty weak.

After the previous weeks’ rumors that the Central Bank may raise rates in the near future, the Governor of the Bank of England dampened that sentiment by saying that now is not the time to raise rates. The real issue is the uncertainty going through the UK. The government has not been properly formed. Brexit is still a worry for the economy, and in fact the UK economy is pretty sporadic. All these things make it difficult for the Pound to move higher. However, markets are weird, as we know. We may well see a rise up in the near term, but certainly not too far.

This week the range stays the same 1.1150/1.1450. However, be careful for a potential sharp move and that may surprise by going higher. There is much more to come for the Pound in the coming months that's for sure.

Have a good week.

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The Premier FX Team

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