So much for possible rate hikes Mr Carney – Maybe next year eh..?

Until the UK and Europe start actually talking about Brexit this is going to get worse, or is that the master plan from Europe?

After poor PMI figures yesterday the Bank of England kept interest rates at record lows and cut its forecasts for growth and wages. This meant the likelihood to “up” interest rates in the short term was taken off the table resulting in the Pound falling off the cliff losing more than 1.5 cents against the $.

So much for possible rate hikes Mr Carney – Maybe next year eh..?

So much for possible rate hikes Mr Carney – Maybe next year eh..?

So much for possible rate hikes Mr Carney – Maybe next year eh..?

This is the situation.
1 – The MPC are constantly split over interest rate decisions (a mess)
2 – Inflation is 2.6% – 0.6 above target (a mess)
3 – employment is at a 4 decade low (a mess)
4 – economy is at its slowest pace since 2012 (a mess)
5 – wage growth is weak ( a mess)
6 – PMI numbers this week suggest slow growth (a mess)
7 – Brexit talks aren’t going anywhere meaning this will probably get nasty. If this does not gather momentum soon as we approach the deadline fears will be that the UK economy will get battered.

Until the UK and Europe start actually talking about Brexit this is going to get worse, or is that the master plan from Europe?

The UK is the worlds 5th largest economy and wants to do business. Westminster needs to work out how it can survive without Europe and set the stall out from there (that’s their job).
Our Politicians need to grow a backbone and go to the time wasting bureaucrats in Europe and “tell” them what the UK wants.
If Europe does not agree, and it isn’t going to anyway no matter what is suggested, we then go our own way with more or less immediate effect. The UK people called it on – so let’s get it on then.

It really is in everybody’s interests for this to go as seamlessly and as quickly as possible – there is so much at stake. If the Euro-zone think that they and the Euro are going to come out of this smelling of roses if we end up with a tough deal then sadly they are mistaken.
The withdrawal of the UK will leave a massive hole in their group and budget especially if the UK decides to “knock” them for the so-called future debt agreements. When you’ve served withdrawal upon maturity of the plan that’s it, you’re out.
You don’t go on paying for a house once you’ve left it and moved on.

Personally I think they are going to try to make an example of the UK’s exit so as to warn anyone else not to be so hasty if they were thinking of referendum and eventual exit.

Controversial it may be but has anyone even thought that maybe the Germans might have just had enough by then and they leave.
What Euro-zone now…..?

Back to the UK.
The Pound is quite frankly going to get a pounding shortly and the longer the Brexit stalling tactics go on the worse that battering will be. Therefore I think that maybe the short term “higher” forecast I made (correctly) could be over. 1.3500 was my ceiling. It was from there that I expected the drop to come from however it does not look like it is going to get there with things as they are right now. So unless something of real significance happens very soon this could be the Cable top (It showed how fragile it was yesterday).
From here on in I’ll be looking for “short” trade opportunities.
£Yen will be looked at carefully.

Oil – how slippery can this get?
As I have said, all the time this is between $48 and $50 this volatile and extremely aggressive whipping will continue.
Now with Venezuela in the picture anything could happen.

That’s it, I’ll get off my soapbox now.
Officially I am having a “trading break” for a couple of weeks as of today and will be back in the chair on 21st August.
That said I will be keeping an eye on things and as things develop I may do the odd blog or trade here and there.
Any such trades will be loaded onto the site around 22nd August.

Non Farm Payroll this afternoon guys so let’s take care at 13:30
Will the $ slide further becoming the driver of pairings?
We shall see.

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