Full research is available here.
Highlights of the latest Market Research on GBP:
After losing value every single day except Monday during the research time period, the British Pound became the worst performing currency in the market last week. It was also joined by the Australian and Canadian dollars, which lost 0.96% and 1.29%, respectively due to pressure coming from oil prices. Moreover, all mentioned currencies were struggling amid US Dollar’s relative strength caused by comments from different members of the FOMC, including Chair Janet Yellen, concerning the upcoming rate increase. They confirmed that it is likely to take place in 2015. The Greenback, however, finished the period with a slight 0.11% loss.
Even though the period was unusually quiet in terms of inland fundamental releases, the Pound managed to register well-uplifted volatility in course of the whole time period. Regional spikes in the Volatility Index were taking place every day, but they were predominantly caused by news coming from different countries around the world. Therefore, the elevated volatility stood at healthy level of 45%, down slightly from average of 47% showed by the market. The threshold of 50% was reached by the EUR/GBP cross (53%) due to high fluctuations of the common currency and GBP/CHF (50%). GBP/CAD was in turn the most silent currency pair during the period as it was increasingly turbulent in just 24% of all time.
Correlations between different crosses of the UK currency held at fairly high levels in course of the reported trading period, while the composite hovered within normal range of the last few weeks. Looking at the mean correlation coefficient (0.36 points) for the five-day period from Wednesday of last week till Tuesday of this week, it was marginally higher than 0.33 points registered during the past month. Moreover, it has precisely matched the annual reading of 0.36. Components, which posted longer tails, included GBP/EUR & GBP/AUD and GBP/EUR & GBP/NZD as their average correlations even failed to exceed 0.2 points.