The crisis in Argentina and Corbyn attacks Johnson

19 ส.ค. 2019

The crisis in Argentina. Argentina’s stock market lost more than 30% on Monday, and the Argentine peso also fell significantly. The ghost of default in Argentina scared investors around the world. Given that it is all about the 25th largest economy in the world, their fears are more than understandable - this could well be a signal for a full-fledged global crisis, the prerequisites for have been formed for a long time ago. In this light, the constant attempts of gold to “gain” a foothold above 1525 are understandable. But on the other hand, our recommendation to sell on growth paid off all week, giving good earnings almost every day. So this week we will continue to adhere to a similar tactic.

As for the Pound. Even though its weekly growth was slightly more than 100 points, it is important, that in dollar pair, it was able to gain a foothold above 1.21. The reasons for growth were good statistics on retail sales and the labor market and Brexit.

So, last week, pound sellers were flustrated by aggressive rhetoric from the British opposition. Jeremy Corbyn, British politician serving as Leader of the Labour Party and Leader of the Opposition, called for a vote of no confidence and declare a caretaker government that ensures that the country will not leave the EU without a deal and will hold early UK elections.

We emphasize that it is all about the rumours, so this week we will continue to look for points for pound purchases.

As for the dollar. U.S. retail sales came out pretty good, however, we still continue to recommend its purchasing. Market expectations regarding the September FOMC meeting unchanged - 100% of traders believe that the rate will be lowered by at least 0.25%. This alone is enough to maintain our confidence in a dollar decline.

As for the upcoming week, in terms of macroeconomic statistics, it promises to be relatively calm. The main event will be a symposium in Jackson Hole - guaranteed a lot of comments from representatives of leading central banks, which will certainly lead to spikes in volatility in the foreign exchange market. So you should be prepared for this and adjust the parameters of open positions for this factor.