HYCM Market Insights & Trading Tips

Market Mood EURNZD 12.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the EURNZD pair on Youtube.


Strong EUR, Weak NZD

The RBNZ has launched a set of bearish policies extending its asset purchases programme and being open to negative interest rates. They increased their quantitative easing (LSAP) programme to $100bn and extended its length from 12 to 22 months. Furthermore, the RBNZ expressed a preference for a lower or negative OCR and a ‘Funding for Lending Programme’, while leaving all options on the table. This should mean a weaker NZD against the EUR for the next session.
Therefore expect buyers at the market on the EURNZD pair.

We expect this trade to play out between now and the next 8 hours.

Trade Risks: If we see any very bearish news for the EUR that will invalidate this trade.

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UK employment falls by the highest amount in a decade
by Giles Coghlan, Chief Currency Analyst at HYCM

The GBP has remained remarkably strong recently. Now the most recent set of jobs data from yesterday have shown that cracks are sadly starting to appear for the UK.

The UK’s finance minister has always said that every UK job can’t be protected. The Bank of England is forecasting a jobless rate of 7.5% by the end of this year, so the latest data is in keeping with the projections. The latest UK jobs data from yesterday show some of the COVID-19 induced slowdown in the jobs market is now starting to appear in the data.

Employment falls by most in a decade

Employment has fallen by 220K for Q2 and the UK payrolls data show that employment has fallen by 730K since March as people are removed from payrolls. The unemployment rate is held steady at 3.9%, but that is artificially held where it is due to the furlough scheme which is paying inactive workers. This number will increase as further people become unemployed. Pay also fell by the most in over 10 years from the April to June period (1.2%) which is indicative of how workers on the UK’s job retention scheme only receive 80% of their pay.

GBPUSD bulls held in check by the monthly trend line

Technically the GBPUSD is held by the monthly descending trend line below. As long as the GBPUSD stays below that trend line, the bears are in control.


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Reasons for NZD weakness
by Giles Coghlan, Chief Currency Analyst at HYCM

Trade the strong against the weak

One of the key trading principles to really embrace in the FX world is that of pairing strength against weakness.

So, yesterday we had a good example of putting this into practice via a central bank policy decision. This was the decision by the RBNZ.
Going into the RBNZ interest rate decision, you may ask yourself what to do before the RBNZ rate meeting. The answer is simple, you are going to wait. Waiting for the central bank to show its hand. The RBNZ has now done that and that is what gives us a bearish bias.

Yesterday, after the decision we posted this outlook.

Reasons for NZD weakness

The RBNZ launched a set of very bearish policies extending its asset purchases programme. They increased their quantitative easing (LSAP) programme to $100bn from $60bln. Prior to this meeting, there were no expectations of an extension in their bond purchases. Furthermore, they extended the length of the programme from 12 to 22 months. To top off the bearish outlook the RBNZ then expressed a preference for a lower or negative official cash rate as well as a Funding for Lending Programme’. AN extremely bearish position.

So, we now have a short to medium term NZD weak bias, look to pair it with currencies as they show strength.

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Market Mood AUDNZD 13.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the AUDNZD pair on Youtube.



AUD strength
Australia’s employment change data showed some encouraging signs for Australia’s job market. July’s data showed an addition of 114.7k jobs and 43.5K of these were full time The unemployment rate also came in lower at 7.5% vs the 7.8% expected.

NZD weakness
Building on the RBNZ’s dovish picture yesterday deputy Governor Bascand said that the resurgence of the virus in New Zealand is a big risk. He said that the RBNZ will probably combine negative rates with funding for lending programmes if more stimulus is needed beyond yesterday’s $40 billion QE extension.

This should mean a weaker NZD against a stronger AUD for today’s session. Therefore expect buyers on pullbacks on the AUDNZD pair.

We expect this trade to play out between now and the next 3-4 days.

Trade Risks: If we see any very negative US-China news that will weigh more heavily on the AUD than the NZD and will invalidate this outlook.

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Market Mood XAGUSD 14.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the XAGUSD pair on Youtube.



The outlook for silver remains fundamentally bullish. World interest rates are low and look set to remain that way. QE programmes from central banks around the world are devaluing currencies. Silver still has a long way to catch up to its previous all-time highs, so buyers will still be attracted to silver compared to gold which has already taken out its all-time highs.

The recent falls in the precious metal have been in keeping with a pullback within a wider bull trend. Due to the huge ranges involved in trying to set stops on this market one strategy that traders will be using is taking breaks of trend lines. If price can climb and stay above the trend line it tells you that bulls are in control.

Expect silver buyers on breakout of descending trend line.

Trade Risks: If we see a swift return to central banks raising their interest rates that will invalidate this outlook.

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Gold bull market still technically fundamentally in place
by Giles Coghlan, Chief Currency Analyst at HYCM


At the start of the week, a number of clients had it pointed out to them that gold’s recent highs could be starting to look vulnerable. It is important to realise that markets don’t tend to move in straight lines. What goes up quickly can also come down quickly. This turned out to be the case with gold. Earlier this week gold saw its largest daily drop in 7 years.

Don’t panic!

The large falls in gold had some traders panicking. You may be one of them.

One area to be very careful of is not using high amounts of leverage in these kinds of markets. So, if you are sat in loss and feeling dazed this post is a reminder of the technical and fundamental picture for gold.

Gold’s bull market remains fundamentally in place

World interest rates are low and this supports the attractiveness of gold. Furthermore, real interest rates are negative and when/if they drop further gold prices, will also rise in tandem.


Pullbacks are the normal ebb and flow of the market

The current pullback in gold is a very ‘normal’ pullback to the 50% Fib retracement level from June’s lows.



Near term, stops will be under $1880

Near term stops under the $1880 region can be considered now that we are seeing US10Y bond yields pull back from their recent moves higher. This is a place where stops will now accumulate.

How about a re-entry price?

If you are thinking of re-entering this market look for an intraday trend line break higher as price/if price starts to consolidate from here. Finally, if you did experience a large loss by this move higher in gold use it as a learning point. Learn that violent moves higher are often accompanied by violent moves lower. The largest bear markets can happen in the strongest bull markets and vice versa, so manage risk accordingly.

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FX Week Ahead 17.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Gold has finally pulled back from its recent run higher recording its largest single day drop in the last 7 years this week. US10 year bond yields broke higher midweek which preceded the large fall in both gold and silver prices. Investors will be keeping a careful eye on real interest rate levels going forward to try and see how far the gold bull run will ultimately go. The present move lower, although large, was still a pullback from within the existing medium term bullish trend for gold. Goldman Sachs are projecting gold prices of $2300 by year end.

Key events from the past week

1. NZD: RBNZ cash rate, August 12. The RBNZ increased their quantitative easing (LSAP) programme to $100bn from $60bln and extended the length of the programme to 20+ months. The RBNZ were open to negative interest rates. This bearish outlook led to strong selling in the NZD out of the decision.
2. XAUUSD: Gold pulls back aggressively, August 11. Gold fell more than USD 100/oz in 24 hours this week as US 10Y bond yields broke out higher. A correction in gold was due and buyers came in at the $1880 50% fib retracement level from June lows. Will gold re-test recent highs or correct even lower next week?
3. AUD: Employment data, August 13. Employment data is a key focus for the RBA. July’s data showed an addition of 114.7k jobs and 43.5K of these were full time. The unemployment rate also came in lower at 7.5% vs the 7.8% expected. However, positive this data does not reflect the lockdown impact of Victoria state.

Key events for the coming week

1. USD: FOMC minutes, August 19. The FOMC minutes will be carefully viewed for any evidence of the Fed wanting to use yield curve control. With inflation rising investors will want to know how likely the Fed are to follow the Reserve Bank of Australia in keeping bond yields artificially low.
2. EUR: Flash PMI’s, August 21. The Eurozone PMI’s have seen a positive recovery from the worst of COVID-19. Another strong reading here will continue that narrative as long as European COVID-19 cases don’t rise too high.
3. COVID-19: Case count growing in Europe. This week saw a further increase in COVID-19 cases in mainland Europe. As we see a continued fall in US cases, yet a rise in European cases this has the potential to weaken the EURUSD.

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Market Mood EURUSD 17.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the EURUSD pair on Youtube.



Strong EUR, Weak USD

The outlook for the EURUSD is that the 1.1900 level should remain significant due to a large option expiry level at 1.19000. The majority of these options have a call (buy) bias, so the weak Dollar Index this am should pull prices towards the level.

Expect the break of the trend line on the 1 hr chart to precipitate a move up to 1.1900 before the NY cut at 14:00GMT. Typically a large option expiry level will cap prices at that point until the NY cut has passed (post 14:00GMT). However, with the dollar weakness continuing from last week the 1.1900 may act as a support area for the price, so keep an eye for any price action rejecting the 1.1900 level particularly for in the second half of the European session after 14:00GMT.
Expect buyers on the breakout marked for the EURUSD pair.

Trade Risks: If we see a strong risk-off sentiment enter the market that can result in dollar strength.

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The problem of ageing and debt
by Giles Coghlan, Chief Currency Analyst at HYCM

There are two things said to be certain in life and that is death and taxes. For most of us, that’s generally true. However, we can now add a third certainty into life and that is going to be debt. Debt levels are set to rise to the largest levels in recent history. According to the International Monetary Fund in June the public debt, as a share of GDP in advanced economies, is set to come in at over 130% for this year and next. To put that into some kind of context it means that we are heading to embrace debt levels that are greater than the debt built up from the second world war. Looking at the chart below you can see that the double impact of the Global Financial Crisis and COVID-19 is pushing debt to record levels. This debt will have to be paid eventually.



The problem of ageing

On top of this debt issues that is a further problem heading up. A publication from the Lancet in the UK suggests that there is a falling population that could fall by 9% at the end of the century. This means that there is expected to be a large decline in the numbers of working-age adults. In fact, some countries are projected to be particularly badly hit like Japan, Spain, Portugal, and Thailand which are all expected to see their populations halve by the end of the century. Then the countries which are projected to see 25% population declines are also projected to see a higher ratio of older to younger people. The impact of this is that more of this debt is going to be shouldered by fewer and fewer people as an ageing population raises further spending considerations.

What’s the trade?

At present, there is nothing to trade on. However, the above tells us that there will be moves by more and more governments to start to cap this debt problem while also addressing the population problem. Tax incentives for having children would most likely start coming in. The main concern is that of debt default. As long as the willingness to repay remains, then the debt pile can be reduced. The main risk is if the debt becomes too great and the easiest solution is to just walk away. If this starts to happen risk markets could find they come alive on the risk of defaults. Again, not an issue for now – but may become so in future months and years.

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Market Mood AUDNZD 18.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the AUDNZD pair on Youtube.



Strong AUD, Weak NZD

The outlook for the AUDNZD pair has more upside in the present market conditions.

The AUD has been strong as US stocks have been supported over the last few weeks. The AUD is closely correlated to the S&P500, so as it rises the AUD is supported too.

The NZD has been weak as the RBNZ has made a bearish monetary policy move. Bond purchases have been increased by $40 billion to $100 billion and the program has been extended to over 20 months from 12 months. The RBNZ is also opening the door to negative interest rates in order to try and stimulate the economy.

Therefore, expect AUDNZD buyers medium term from any return to the descending trend line on the weekly chart.

Trade Risks:

1. If we see strong risk off sentiment enter the market that can result in more AUD weakness than NZD weakness and invalidate the outlook.
2. A fresh flare up in any US-Chinese tensions/disputes will also result in more AUD weakness than the NZD and invalidate this outlook.

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Chinese property investment set to boost Copper demand?
by Giles Coghlan, Chief Currency Analyst at HYCM

According to Bloomberg it could be a boost into China’s property investment that sends copper prices higher over the next few days. Bloomberg point out a very interesting correlation in that a rise in Chinese property investment tends to lead to a rise in the Bloomberg Industrial Metals subindex. They are linked. If you take a look at the chart below you can see the relationship and how it has been playing out recently.


In July of this year property investment moved up +3.4% y/y vs the estimated reading of 2.5% y/y. This was also faster than June’s +1.9% pace. This also occurred in tandem with record volumes of steel and aluminium last month. So, this resurgence in was enough to help copper pull off last Friday’s lows and held the key trend line on the daily chart as outlined on the chart below:


The ongoing tech war between the US has led China to focus on kickstarting domestic demand. However, the People’s Bank Of China’s stimulus has been coming in at a steady pace (rather than a fast pace) and the consumption rebound is showing signs of stalling. Property investment on the other hand remains the main driver of China’s economic recovery. So, this could be another reason to boost copper higher over the next few days. Take a look at copper below and the key trend lines ahead that will need to break in order to open the way higher for bulls.


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Market Mood HG1! 19.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the HG1! on Youtube.


The outlook for copper is strong fundamentally at the moment and copper has been underpinned overnight rising above the $3 /lb level as the London Metal Exchange rose to their highest level in more than 2 years. Going forward demand for copper is expected to rise. All the green technology through alternative energy sources heavily rely on copper wiring as a conductor. The demand for copper in the future looks set to grow. Also, a strong boom in property investment in China is further helping near term copper prices higher.

Therefore, for today’s session, expect pullbacks to the trend line marked to find buyers.

Trade Risks: If we see strong risk-off sentiment enter the market that will result in global growth concerns weighing on copper prices and invalidate this outlook.

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Westpac, Australia’s second biggest bank, scraps its dividend

by Giles Coghlan, Chief Currency Analyst at HYCM

There have been warnings that dividends would have to go to Australia. The recent decision yesterday by Westpac to halt its dividend shows that the economic realities are starting to hit Australia. Australia’s S&P/ASX 200 index has consistently offered one of the greatest dividend yields in Asia and beyond, but that may be about to change if more and more corporates slash their earnings.

First cut in over 30 years

According to Refinitiv data Westpac paid an interim dividend of 94 cents last year and have paid one every 6 months for the past three decades. This was until yesterday when the board met for their Q3 meeting and decided not to pay the first half dividend for 2020. The reason given by the board was that the bank wanted to maintain a strong balance sheet amidst the ongoing uncertainty in the operating environment. This now means that the next opportunity to review the dividend will be considered as part of finalising the full year’s 2020 results. You can read Westpac’s 3Q2020 update here.

According to the Bloomberg piece reporting on Westpac’s dividend cut the outlook from analysts had been that Australia shareholder payouts could fall as much as 40% in 2020 and continue to fall in 2021 as the continued drag from COVID-19 via lockdowns and restrictions weigh on corporate earnings. This is also expected to potentially weigh on household earnings due to the large share of domestic equities in retirement and investment portfolios.

Technical level on the ASX200

Going forward, keep an eye on the 6200 level on Australia’s SPX200 for the near term battle between bulls and bears. Stay above and bulls have the momentum higher again. A move below and that signals that the bears are keeping prices capped.



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USD weakness expected to stay?
by Giles Coghlan, Chief Currency Analyst at HYCM

This Tuesday saw some very strong housing starts data out of the US. This is despite the rise of record mortgage defaults that have also been reported. The US housing starts data was 1496K vs 1245K expected and this was up from the prior of 1186K. New starts were up over 20% on the month and permits up over 18%.



So, with mortgages going unpaid and rent not being met, why the housing boom now? Is it just because of low-interest rates spurring fresh demand? Another explanation from a Bloomberg opinion piece is that the US housing market is being used as a means to protect wealth. To be specific that it is against the potential that the Federal Reserve’s huge stimulus package will devalue the dollar.

Warren Buffett warms to gold

Warren Buffett’s Berkshire Hathaway sold large stakes in American banks like Goldman Sachs and JPMorgan in the last quarter. He has moved into areas previously he has ignored. His stake in Barrick Gold hit all the big news wires as Buffett has historically been against holding gold investments. However, is the shift by Buffett an assessment that banks are going to struggle to keep their value as the dollar weakens? However, in contrast, the gold miner’s chief asset, gold bullion, rallies even higher. Even more when fuelled by a weak dollar.

Many analysts have been expressing their concern that the USD is heavily oversold, but there are important fundamental drivers which weaken the USD. The launch of virtually unlimited Quantitative Easing, the drop in safe-haven dollar demand, a high US COVID-19 case count, and the Stimulus Bill political stalemate have all aided the dollar’s fall. Although the FOMC disappointed last night and the dollar gained as the minutes showed reluctance for yield curve control it remains to be seen how, if at all, Fed policy will change. This should keep the demand for non-dollar assets supported and underscores the remaining bullish case for precious metals like gold and silver in the medium term until something changes.



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Market Mood EURUSD 20.03.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the EURUSD pair on Youtube.



Weak EUR, Strong USD

The anticipated FOMC minutes last night disappointed the market as it showed that the Fed is less accommodative than the market was anticipating. The yield curve control was mentioned as a monetary policy tool, but most participants considered the tool to only provide modest benefits. Furthermore, there were many participants who pointed to potential costs associated with yield caps. The reluctance to use yield curve control supported the USD. Remember that the Bank of Japan and the Reserve Bank of Australia have both used yield caps, so there are some recent examples of this policy in action for the Fed to consider. Due to the disappointment in the Fed minutes, the Dollar Index reclaimed the 93 handle and dragged the EURUSD down from 1.19000.

Therefore, for this session expect EURUSD sellers from rallies higher.

Trade Risks: If we see strong risk-on sentiment this will weaken the USD and push the EURUSD pair higher.

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How to trade a central bank divergence: RBNZ and RBA case study
by Giles Coghlan, Chief Currency Analyst at HYCM

Central bank divergence

One of the first principles to teach aspiring FX traders is trading a strong currency against a weak currency. In this way, it is easier to determine direction. A great example of this is now occurring in the AUDNZD pair. We have reasons for continued NZD weakness against the AUD. This is due to a divergence in policy between the RBA and the RBNZ.

A dovish RBNZ

The RBNZ yesterday confirmed that it is prepared to use negative interest rates to boost the economy. This is a confirmation of the latest policy decisions from the RBNZ. In that decision, the RBNZ launched a set of bearish monetary policies. Firstly, the RBNZ increased their quantitative easing (LSAP) programme to $100bn. Secondly, they extended the length of the programme from 12 to over 20+ months. Thirdly, the RBNZ expressed their general reference for a lower /negative OCR and a ‘Funding for Lending Programme’. This is Bearish stuff. The impact in the NZD 10Y bond market was telling. A falling bond yield is indicative of lower interest rates.



A less bearish RBA

The RBA, on the other hand, is not actively pursuing negative interest rates. At present that would be an unlikely course of action. Yes, the Reserve Bank of Australia knows that negative interest rates would be a stimulatory benefit by putting downward pressure on the Australian dollar. However, they are probably wary that negative interest rates can cause unwanted stresses in the financial system.

AUDNZD upside

So, as a result, the AUD should remain stronger against the NZD. Therefore, buying on dips makes sense for the AUDNZD pair as long as this central bank divergence remains the same.


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Market Mood Copper 21.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the COPPER on Youtube.


The fundamental outlook for copper remains positive and buyers should appear on pullbacks. There are supply issues, expectations for a weaker dollar, as well as the bounce back in global growth prospects on successful vaccine hopes.

Output has fallen. China’s refined copper output has fallen 5.3% in July from the previous month to 814K tonnes. The global copper smelting activity according to Reuters has fallen to its lowest level in more than two years based on satellite surveillance on copper plants. The total copper stocks in warehouses monitored by the LME were at their lowest levels since 2007, supporting prices Finally the weak US dollar on higher COVID-19 cases, some disappointing high-frequency data like jobless claims and high quantitative easing levels all support a weak USD going forward.

A weaker USD makes London Metal Exchanges priced in USD cheaper for holders of other currencies.

Therefore, expect copper to find buyers on pullbacks as long as this situation remains the same.

Trade Risks:

1. If we see strong USD strength enter the market that will invalidate this outlook.
2. If we see risk tone turn off that will also invalidate this outlook.

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FX Week Ahead 24.08.20
by Giles Coghlan, Chief Currency Analyst at HYCM

This week was dominated in the first part by USD weakness and a strong rally higher in Copper. Total copper stocks in warehouses monitored by the London Metal Exchange were at their lowest since 2007. This helped push copper prices over the $3/lb level. It was otherwise quiet in terms of scheduled data with the FOMC minutes from July’s meeting the main focus midweek. The minutes themselves showed that the Federal Reserve was less accommodative than the market was expecting and this resulted in some unwinding in the heavily oversold USD positioning going into the meeting. A strengthening dollar then weighed on gold, silver, and copper prices into the end of the week.

Key events from the past week

1. FOMC minutes: Fed disappoints markets, Aug 19. FOMC minutes revealed that most Fed board members were sceptical about the benefits of yield curve control. This resulted in some USD strength as the Dollar Index moved towards 93. Watch out for reactions to these market moves by Fed speakers next week.
2. GBP: Surprise CPI inflation spike, Aug 19. Rising petrol prices alongside higher contributions from clothing & footwear gave UK inflation a surprise boost in July. However, the Bank of England still projects a fall of 0.4% in headline inflation.
3. US oil: OPEC+ review, Aug 19. On Wednesday OPEC+ met to review compliance with oil cuts. OPEC+ stressed the need for better compliance from members. On the whole US crude futures remained flat after the meeting, so it will be back to the overall risk tone to determine oil’s path for next week.

Key events for the coming week

1. USD: Initial jobless claims, Aug 27. A falling US jobless claims print is important for showing early signs of a pick up in the US economy. The print is expected at 925K and any reading below 750K will be a positive surprise.
2. CAD: GDP for June, Aug 28. The Bank of Canada expected the economy to fall by -7.8% this year and a y/y contraction of 14.6% in the second quarter. Will the GDP data on Friday confirm the BoC’s bleak outlook or deliver a surprise?
3. Copper: Rallies above 2 years high, Aug 24. Copper rallied to its highest level in two years last week. The combination of a weaker dollar, low stocks, a pick up in demand and a falling output all supported copper prices. However, will we see Copper bought on dips next week?

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Market Mood S&P500 03.09.20
by Giles Coghlan, Chief Currency Analyst at HYCM

Listen to the latest market mood for the S&P500 on Youtube.


Risk sentiment is positive this morning as hopes of a November vaccine trial are boosting equity markets. The DAX, DOW, and Euro Stoxx futures are all higher on the day heading into the European open. The US Centre for Disease Control and Protection (CDC) asked US states to prepare for a possible COVID vaccine by early November. Furthermore, the National Institute for Health’s (NIH) Dr. Fauci said that based on COVID-19 vaccine trial enrolment rates there could be a vaccine ready by November or December.

This positive sentiment should keep the S&P500 futures markets supported in the session. However, COVID-19 infections in Europe are nearly back to March levels which could offset some of the near term optimism. Furthermore, the White House is set to clarify the extent of the WeChat and TikTok ban within weeks. Depending on the length and extent of the ban this could change the risk tone and invalidate the outlook.

Expect S&P500 future buyers on pullbacks.

Trade Risks:

1. Rising European COVID-19 cases
2. Any Escalation of US/China trade tensions
3. Any negative news that changes the current positive risk tone

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Trouble ahead for the GBP?
by Giles Coghlan, Chief Currency Analyst at HYCM

The strength of the GBP over the summer was somewhat of an enigma. In the end, it was really a USD weakness story. It was only natural that the GBPUSD pair benefitted from record flows of USD weakness. However, the path ahead for the GBP looks more complicated now.
The fact that retail sales rebounded more than expected in July was overlooked by the market. The m/m reading came in at 13.9% vs 8.3% expected which on the face of it seems great. However, the market did not get carried away as job cuts keep rolling in, consumer confidence remains low, and the potential of more local lockdowns remains in place.

On top of the general caution, there are some weighty risks ahead. The first if the UK’s government furlough scheme comes to an end in October. How many companies have been holding back redundancies until the end of the scheme? Also, how many companies will say, ‘you can keep receiving 80% of your pay or you can lose your job?’

The second is the spectre of Brexit. It feels like the UK has been stuck in a Narnia like Brexit world where it is ‘always winter, but never Christmas’. The received wisdom is that the functional deadline for getting Brexit organised is the end of October to allow enough time for due process before the official year-end deadline. Recent relations at the time of writing have been very ‘so-so’, with Britain keeping to a hard-line negotiation with Dominic Cummings as Johnson’s chief adviser.
The above two issues will weigh on consumer sentiment. Of course, it will. Jobs falling, UK dropping out of the EU with a hard Brexit, and a fundamental shift in consumer spending. The UK needs consumer spending as around 63% of the UK’s output comes from the consumer. This is compared to around 50% in France and Germany.

So, in short, be careful around the GBP. Prepare for volatility and either 1) be nimble around the news flows or 2) hold a long term position according to your bias and ignore the noise.

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