Interest rate expectations were already elevated for the British pound
City Index February 24, 2011 12:30 PM
<p>GBP/USD Range: 1.6200 – 1.6252 Support: 1.6145 Resistance: 1.6280 Interest rate expectations were already elevated for the British pound – and we have seen the […]</p>
With the slide in European shares carrying over to selling pressure into the US session yesterday, the weight on risk trends in the FX market was increasing. The drive certainly translated over to USDCAD which climbed as far as 0.9960. However, the plunge seemed to stall in the second half of the New York session; and to take its place, US oil stepped into with a surge to a two-year high to the psychological $100 level.
Swiss Franc a Different Safe Haven than Yen or Dollar
When we mention safe haven currency, it is reference to a broad category – essentially a currency that appreciates as riskier assets fall. However, there are nuances between them. The yen is largely an anti-carry while the dollar is valued when liquidity in global financial markets is troubled. In contrast, the franc is the closest thing to a safe haven as that term would denote; and that is a factor that could drive EURCHF lower.