Today’s Key Market Drivers: 24th September 2018
“Learning to deal with the uncomfortable feeling trading gives.”
The big story on Friday was the sudden fall on the British Pound following comments by British Prime Minister Theresa May and European Union leaders. Just when we thought a trade deal was imminent it appears both sides are now wide apart once again with Theresa May saying negotiations are at an “impasse”. The British PM is also under pressure to approve another referendum which frankly would be ridiculous and total madness. The people of the UK voted to leave the EU and a trade deal will be done with the European Union in the coming months. I suspect a deal may take right up until the last minute but it will be done it’s simply a case of time and who is willing to give up what they currently won’t budge on. To suggest the UK should vote again is frankly preposterous. As Theresa May correctly said on Friday another vote would make a mockery of the referendum the UK had two years ago that cost David Cameron his job. The UK must get a trade deal done by 29th March 2019 when it will officially no longer be part of the European Union.
The Pound was sold off sharply and I would suspect the selling pressure will remain on the Pound for the coming few days until the US Fed statement on Thursday morning at 4.00am AEST. The UK and EU won’t kiss and make up in the next couple of days and the overwhelming selling pressure on the Pound on Friday will remain early this week.
The market will heat up as the week progresses and it is my view the US Dollar will continue to remain under pressure all throughout the week as traders continue to price in their expectation the US Fed will raise the official cash rate but announce to the market any further rate hikes in 2019 will be gradual and the tariffs imposed by China and other nations may adversely impact economic growth so it will take a wait and see approach.
The Euro remains well supported in the wake of the EU v UK negotiation dramas and this week we will get some important Inflation data for Germany and the Euro Area. If the Inflation data beat the market’s estimates it will only add more upward buying pressure to the Euro which is well off its lows and has broken any downtrend that was in place during July and August. If my hunch with respect to the US Dollar is correct then the Euro is only going to rally further in coming weeks.
Any trade updates throughout the day will be sent via Trade Time. You can also follow my daily updates on Facebook, Twitter, Instagram by searching for TrainwithAndrew. Make sure you subscribe to the Andrew Barnett YouTube channel after watching today’s Sunrise video below.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
If you would like to speak to one of our Senior Client Advisors regarding the relative client opportunities offered at LTG GoldRock and how you can follow along with our Professional traders each day in our live trading room please contact us today or you can register for one of our a live coaching and trading webinars by clicking here.