Do the terms Contango and Backwardation sound Greek to you? Well, they do have an impact on oil prices and we’re here to explain. We then wrap up the Scottish referendum with its future implications and prepare for the important…
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The post Market Movers #17: Contango vs. Backwardation, Scottish reverberations and key US data appeared first on FX FOREX.
The pound is treating traders to strong volatility on Friday. GBP/USD pushed above the 1.65 level in the Asian session but has since fallen below the 1.64 line. The currency received a boost after the results of the Scottish referendum were released, which showed a decisive victory for the NO camp, which favored remaining in the United Kingdom. It’s a quiet day on the release front, with no UK events. The sole US release is the CB Leading Index, a minor event.
Scottish citizens went the polls on Thursday in a historic referendum on whether to secede from the United Kingdom. The markets had expected a very close vote, based on polls leading up to the vote. However, at the end of the day, the No side won the vote in convincing fashion, with 55% of the vote, versus 44% for the Yes side. There had been predictions of a financial downturn in the UK if Scotland had voted for independence or if the vote was extremely close. As well, a vote for to secede would have raised thorny economic issues such as what currency would be used by an independent Scotland. So, the wee hours of Friday morning brought a tremendous sense of relief in British political and financial circles after the final votes were counted, as the United Kingdom will indeed remain united.
Overshadowed by the focus on the Scottish referendum, British data was a mix on Thursday. British Retail Sales, the primary gauge of consumer spending in the UK, improved last month, posting a gain of 0.4%. However, CBI Industrial Order Expectations came in at -4 points, the worst showing since last September. The markets had expected a gain of 9 points.
Over in the US, Unemployment Claims had looked sluggish in September, but that changed on Thursday, as the key indicator sparkled, dropping to 280 thousand, down sharply from 315 thousand in the previous reading. The estimate stood at 312 thousand. Building Permits was not as strong, dipping to 1.00M. This was shy of the estimate of 1.04M. There was disappointing news from the manufacturing front, as the Philly Fed Manufacturing Index slipped to 22.5 points, down from 28.0 a month earlier. The estimate stood at 22.8 points.
The Federal Reserve released a highly-anticipated policy statement on Wednesday. The statement reaffirmed that interest rates would remain ultra-low for a “considerable time” after the asset purchase scheme (QE) ends next month, but surprised the markets in hinting that once a rate hike was introduced, rate levels could move up more quickly than expected. As expected, the Fed trimmed QE by $ 10 billion/month, and the remaining $ 15 billion/month is scheduled to be phased out in October.
GBP/USD for Friday, September 19, 2014
GBP/USD September 19 at 11:05 GMT
GBP/USD 1.6381 H: 1.6524 L: 1.6353
GBP/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.6000 | 1.6141 | 1.6263 | 1.6382 | 1.6484 | 1.6606 |
Further levels in both directions:
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in short positions on Friday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the pound has posted slight losses. The ratio currently has a majority of long positions, indicative of trader bias towards the pound reversing direction and moving to higher ground.
GBP/USD Fundamentals
14:00 US CB Leading Index. Estimate 0.4%.
* Key releases are highlighted in bold
*All release times are GMT
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The post GBP/USD – After Scottish Vote, Pound Jumps, Then Retracts appeared first on FX FOREX.
Scotland will hold a referendum on whether it should be an independent country that will take place on Thursday September the 18th, 2014. Residents of Scotland will be able to vote yes or no on the question “should Scotland be an independent country?” If a simple majority votes yes, the process of Scotland leaving the United Kingdom will commence; whereas if a simple majority votes no, Scotland will remain within the United Kingdom. According to exit polls prior to the independence question, no and yes voters are in balance and the outcome will most likely only be known after each vote has been counted.
How does a referendum impact the Forex market?
The referendum choice will impact the Great British Pound (GBP) due to the fact that an independent Scotland could opt for its own currency. The principal options of Scotland are keeping the Pound, choosing to implement the Euro or establishing an independent Scottish currency.
What will happen to the GBP during the referendum?
How the market will respond to the referendum vote will remain a question mark to the very end, but certainly there is a chance of increased volatility on the GBP in the run up, during, and after the referendum. Be extra cautious with trading the GBP on the referendum day.
How will the vote impact the GBP in the long run?
A UK without Scotland would translate into a smaller economy, which in the long run means more Pounds circulating for less economic activity and is a bearish affect on the GBP. There is also the question of whether Scotland will take over its share of the UK debt. If it doesn’t, the debt versus GBP will increase, which also could have a bearish impact.
What the impact would be of an independent Scotland on the British and Scottish economy, politics, unemployment, life, diplomacy, currency, and many other topics remains unclear. Both the yes and no vote campaign spell danger if their vote is not chosen. In reality, both the referendum choice and the effects of the choice are difficult to predict.
For currency traders: they can expect the referendum to increase volatility and to present itself as an unknown variable throughout this week. In the long run a GBP with Scotland should be more valuable than without Scotland, hence generally speaking a bearish effect might take place if the yes vote wins (yes to independence) whereas a bullish impact might occur if the no vote wins. However obviously any attempt at a prediction could be the equivalent as throwing the dart at a board: who knows what the number will be?
Do you have expectations how the GBP will respond to the vote?
Will you be trying to trade during the referendum or will you in fact be more cautious or even stop trading during this day?
Let us know down below!
Thank you for sharing this post and wish you Happy Trading.
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The British pound continues to point southwards on Monday. In the European session, GBP/USD is trading in the mid-1.61 range, its lowest level since November. The pound is under strong pressure as polls show that support for backers of Scottish independence is increasing. In the UK, Halifax HPI posted a weak gain of 0.1% last month. In the US, it’s a quiet start to the week, with no major releases on Monday.
US employment data continues to be a concern, as the eagerly-anticipated Nonfarm Employment Change crashed to just 142 thousand, its lowest gain since January. The markets had expected a gain of 226 thousand. This follows a weak ADP Nonfarm Payrolls report as well as a rise in unemployment claims. There was better news from the services sector, as the ISM Non-Manufacturing PMI continued its impressive climb, hitting 59.6 points in August, well above the estimate of 57.3. This reading follows the ISM Manufacturing PMI, which climbed to 59.0 points. The impressive readings from the manufacturing and services sectors point to a balanced economic recovery. If US numbers continue to improve, we could see an interest rate hike in the early part of 2015.
The pound’s latest troubles are blowing north of London, as Scots prepare to vote in a referendum on independence later this month. Polls taken on the weekend show that supporters of independence are gaining ground and hold a slight majority. If voters do choose to leave the UK, this would create a lot of questions and uncertainty, including what currency an independent Scotland would use. As voting day looms closer, we are likely to see more pressure on the pound.
There were no surprises from the BoE late last week, which held steady with its monetary policy. The central bank maintained interest rate levels at 0.50%, where rates have been pegged since February 2009. With two MPC members voting in favor of raising rates last month, the markets will be keenly interested in seeing the breakdown of Thursday’s vote, which will be released in two weeks time. If the minutes show that additional MPC members are in favor of a rate hike, BoE Governor Mark Carney will be under pressure to raise rates, which would bolster the pound. The central bank also kept QE steady at 375 billion pounds.
GBP/USD for Monday, September 8, 2014
GBP/USD September 8 at 15:45 GMT
GBP/USD 1.6142 H: 1.6233 L: 1.6103
GBP/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.5864 | 1.6000 | 1.6141 | 1.6263 | 1.6382 | 1.6484 |
Further levels in both directions:
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in short positions on Monday. This is consistent with the pair’s movement, as the pound has lost more ground. The ratio has a large majority of long positions, indicative of trader bias towards the pound reversing directions and moving higher.
GBP/USD Fundamentals
* Key releases are highlighted in bold
*All release times are GMT
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The post GBP/USD – Pound Slips on Scottish Worries appeared first on FX FOREX.
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Home » No Win No Fee » Latest Personal Injury News » 2013 » 11 » Tayside firm fined after electrician’s accidentTayside firm fined after electrician’s accidentA Scottish company has been fined after a worker suffered burns to his face, hands and arms while carrying out regular electrical tests.Gordon Roberts, aged 38 at the time of the incident on December 2nd 2010, had to spend more than a week in hospital because of his injuries, but was lucky to survive and returned to work two months later after making a full recovery.Dundee Sheriff Court was told that Mr Roberts, an employee of McGill Electrical, was testing an electricity substation on the premises of a manufacturing company in Dundee when he climbed a stepladder to take off bolted covers, which guarded access against live conductors he was due to test.But as he did this, a corner of the cover appeared to come into contact with electrical currents and this caused an arc flashover, which struck Mr Roberts.While a colleague was in the vicinity, he did not see the incident, but reported that all the lights went out and the room filled with smoke.Luckily, Mr Roberts was able to walk out of the substation unaided and his co-worker used snow surrounding the area to cool down burns before the ambulance arrived, something that aided his long-term recovery chances.When the Health and Safety Executive (HSE) was made aware of the incident, it launched an investigation that found a suitable risk assessment had not taken place and McGill Electrical failed to ensure that distribution boards were de-energised during the removal of covers.For its part in the accident, McGill Electrical was fined £2,000 after it pleaded guilty to breaching Section 2 of the Health and Safety at Work etc Act 1974.After the case finished, HSE inspector Mac Young said: “This incident was wholly preventable. It was foreseeable that a metal plate being manipulated in close proximity to live conductors could inadvertently touch live parts and cause a flashover.”The system of work, which involved removal and replacement of bolted covers while the system was live, and without knowing what was behind the covers, exposed Mr Roberts to unnecessary risk.”By Francesca WitneyOr Call freephone 0800 884 0321SHARE THIS
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