Photo credit: The Guardian
Normally,
we expect to find Forex fireworks late at night in GMT terms in Oz or NZ, or occasionally
in China or Japan. But last night this happened only a few hundred miles from
where we live, in London.
The
occasion was the London Lord Mayor’s banquet in the Mansion House, which is
often used as an occasion for UK politicians to give advance notice of new
legislation that might be under consideration.
The
Chancellor of the Exchequer had already let it be known that the government was
set to introduce so-called macroeconomic measures to curb mortgage lending on
high loan-to-value house purchases. These have already been put in place, with
some success, in New Zealand and other countries across the globe.
Then
Bank of England governor Mark Carney dropped his bombshell. He said that the
Central Bank would instigate interest rate rises “… sooner than the markets expected”.
Stops triggered
This
had the immediate effect of spurring the Pound Sterling to rise across the
board, against all counterparts. GBPUSD took off, as in the chart above. The
rate against the Euro, EURGBP, dived, as the pound is the second currency in
that pair, the quote currency.
All
this is good for our positions in GBPUSD and EURUSD. Now the Mandelbrot routine
has also kicked in with a position in GBPCAD, on the long side.
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