Saxo Morning Call

'The GBP rally is done and dusted'

Clare MacCarthy
Senior Editor, Saxo Bank

Sterling has been blasted lower after Bank of England governor Mark Carney cast doubt on a previously pretty-much-expected UK May rate hike. The European Union's rejection of Britain's latest Brexit-Irish border plan only served to deepen the rot. "The sterling rally is pretty much done and dusted," says John Hardy, Saxo's head of FX strategy.

"The most volatile currency this week has been GBP. Carney was trying to peddle the message that while he does see rate hikes out in the future, there is also weakness in the UK economy," Hardy adds.

For sterling, these factors mean that poor sentiment will persist pending "something very dramatic" on the Brexit front.

Elsewhere, the Australian dollar is reversing lower against it US counterpart, but higher against the kiwi while the greenback itself is perking up on the back of weakening risk appetite and higher US bond yields.

Meanwhile, over in equities, Saxo Bank head of equity strategy Peter Garnry says that the situation surrounding the beleaguered Rusol aluminium producer "has been catapulted to the highest level". US sanctions against Russia are preventing the company from selling its wares and this is beginning to have a negative impact on the global car industry, especially in Europe.

"In a worst-case scenario this could have a material impact on European growth," Garnry says.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.