European retail appalling

Earlier today Europe surprised the markets with a contraction in retail sales. A fall was expected but the real figures where significantly lower. It resulted in mass selling as the market spiked while pricing in the new information. Clients found themselves that need to buy Euros moving today to take advantage before we enter the concerning phase before the pending interest rate releases on Thursday. 

The markets are now widely expecting a rise from Europe but not in the UK that are also meeting on Thursday.  As this could be the first rise in nearly 3 years many are unaware about what the reactions will be, and interestingly who will lose out the most between either the Dollar or Sterling. The EURUSD or Cable is one of the most traded currency pairs in the world so you would expect people to move out of the dollar to gain from the interest but with 60%-70% of currency being traded in the UK sterling could also see severe losses.

Currently everyone seems to be managing their exposure in line with their risk appetite. I have seen a much larger amount of limit and stop losses be deployed over today as clients have limited their exposure, while others have bought half leaving the other to ride the event. If i was moving money abroad I personally would using both tools and making my exposure smaller with closer boundaries by using limits.

For information on these tools and thoughts about what all the affects are feel free to contact someone here at