Global economies brace for 'Liberation Day'

Both £-€ & £-$ moved by just 1% last week. Whilst this was not the expectation by most, it was certainly the hope. FX market volatility is bad and unfortunately, it's almost certain to arrive this week. More on Trump tariffs below, let's focus on forecasts and ranges here first..

GBP v EUR saw no change from the beginning of the week to the end result and strangely, the pair shows almost the exact same trading and volatility range on the last 30-days & last 90-days - 

1.2120 high v 1.1850 low / 1.1985 average rate / 2.25% volatility
1.2120 high v 1.1820 low / 1.1970 average rate / 2.5% volatility 

This volatility is normal and overall the pair trades in a fair-to-high trading range.

I will be releasing my Q2 GBP v EUR forecast at the end of next week. If you haven't already requested this to me or your account manager and would like to see what I think will happen over the next 3-months please get in touch.

The lucky winner just about this quarter was in fact myself with a 1.18 prediction. If you would like to know how I came to this conclusion, let me or your account manager know and we will send you last quarter's report. Here were the predictions of 5 of the biggest investment banks that are trading FX - 

HSBC - 1.15
Barclays - 1.22
Danske - 1.22
JP Morgan - 1.15
ING - 1.14

Where do you think GBP v EUR will either finish or average out at the end of June??



EUR
The Euro has had a solid March versus the USD (as have most other currencies) rising by over 4%. 1% has also been gained against the pound, but it's uncertain if both trends will continue into the new month. Inflation data is the only major release from the Euro-Zone this week which is expected to be lower.



USD
Here we go then, 'Liberation Day' is nearly upon us and no-one really knows what is going to happen. Global stock markets are in the red today and the $ is stronger, but again no-one is quite sure whether this is market jitters or month/quarter-end position changes.

Trumps threat of tariffs was thought to be a scare tactic by some, a chance to negotiate better terms, but that looks to have completely evaporated. Will wild panic ensue on confirmation? Will the UK escape? How will countries respond? Have the US alienated themselves from Europe?

These are just a few questions no-one has the answers to. Goldman Sachs have today downgraded US growth from 2% to 1.5% and raised the possibility of a recession to 35% from 20% this year, as-well-as predicting 3 interest rate cuts (up from 2). The first of many, many predictions inbound..