Three things we learnt from the latest forex trading: 1) The markets are already off to a good start – they’re already off by $60 per share at the open – with both the Japanese yen and the Australian dollar still under pressure, despite some new interest in commodities.
2) There’s little reason to believe the UK will pull out of the EU – in fact, a Brexit vote is likely to be the least of the uncertainties, with the European Central Bank unlikely to back off its monetary policy for a second time in three months.
3) And there’s reason to expect a big shakeup in the trading world.
The markets closed at $5.15 per share and the S&P 500 futures index was at $1,945, according to the US-based BATS International exchange.
It was the biggest close for a month since March, when the markets closed down by $12.20 to $9.88 per share.
But a sharp rise in oil prices and the US Federal Reserve’s latest interest rate hike has made it even more difficult for the markets to clear $5 a share.
The dollar is trading around $1.3195, a six-week high, and the euro has traded in excess of $1 as investors take comfort in the US dollar’s continued strength.
Here’s what you need to know about what’s happening on the forex markets ahead of Brexit and the EU referendum.
The UK is now on track to leave the EU, but a deal with the EU may not be imminent The market has seen strong sentiment for the UK to leave, with sentiment reaching its highest level in five months and up almost 3 per cent in the past 24 hours.
That was before the referendum on EU membership was held, and was followed by the Brexit bill, which the Government has been pushing through Parliament in the hope of clearing the way for a smooth exit from the EU.
But the UK may still not be able to achieve a deal before the end of the month, according the latest BATS data.
The market will be very much on the brink of a Brexit shock at the moment, and traders are already predicting a Brexit-induced collapse.
It looks like the markets are off to the best start of the year ever.
It’s already up $60 a share at this point, and has already been up over 20 per cent since early July.
It is not a surprise that sentiment is already in a bullish mode, as the markets were already very high at the start of July.
The markets are still very much in a bear market, which means a sharp correction is likely, with a potential Brexit-related collapse.
But there is a way out.
There are ways to help.
There’s no need to panic just yet.
The US Federal Open Market Committee has set a June 31 deadline for the US Treasury to publish its plan for how to handle a possible Brexit-type scenario, and that deadline has passed with little fanfare.
But traders may still have a way to act, as there is some relief in sight, with Fed chair Janet Yellen set to release her first policy report on Wednesday.
If Yellen releases her report, it is likely that she will recommend that the Fed continue to support the US economy, as it has been doing since mid-2016.
That would mean the Fed would continue to buy dollars in an effort to help the US as it prepares for the possibility of Brexit.
The Fed has also been doing this, but only on a smaller scale.
On Thursday, the US central bank also set a new short-term interest rate target, with rates rising to 0.25 per cent by the end