There is a strange correlation between the US dollar and the British Pound. The pound goes further than the dollar, whichever direction the dollar takes.
Whenever the dollar rises – the pound rises as well – and also against the dollar. And whenever the USD weakens, GBP weakens even more.
Today, Januray 5th has been a day where the US dollar made gains against most currencies. We’ve seen it rise against the Swiss Franc USD/CHF 1.11, against the Yen – USD/JPY 93.51 and the Euro fell against the dollar to EUR/USD to 1.3567.
Only the British pound gained against the dollar – and naturally against all the other currencies. GBP/USD now trades above 1.4660.
This phenomenon has happened during the holiday weeks, but today, when full scale trading resumed – it has come to an extreme.
The “wildest” pair has been GBP/CHF which gained 4%. Also EUR/GBP, which was close to parity, drifted away from there. EUR/GBP now trades at 92.70, a daily loss of 3.5%.
This has no econmic justification, and no other reasonable explanation I can find.
Does anybody have a clue?