Reports that an improved offer from Kraft has been accepted by Cadbury’s has sent the pound higher with cable above 1.6400 and EUR/GBP tumbling below .8780.
12 Responses to “Sterling rallies again as Cadbury deal done”
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AUTOREFRESH 
First…. great to have you back Sean. Second… is this what sent eur/usd up 10 pips?
EURUSD going nowhere, Stephen … market is buying GBP by selling EURGBP and buying GBPUSD
Hi Stephen, thanks and good to be back. Good selling interest in EUR/USD 1.4410/20 I hear so it might struggle to get much higher regardless of what the cable does.
Sean, the Cadbury deal looks pretty large, how long does this type of deal affect the market usually after it is revealed? a few days? Is it related to how it it takes to convert teh amount of currency for the transaction?
Confirmed then EURUSD needs to break 1.4422 to go higher
Stev, with these large multi-nationals who have major enterprises all over the world there might not be an FX componenet. Everyone presumes that as a US entity buys a UK entity then there must be some GBP/USD buying but that is not always the case. Plus if they have been planning the purchase for some time then they will have option strategies in place to hedge against any large unforeseen FX moves. In other words, my experience is that these are often “buy the rumour sell the fact” trades.
Thanks Sean! I guess the market is always on the look out for catalyst to move
sean, so what do you see Cable doing from here? Currently at 1.6415.
Hi Anthony. My first instinct this morning was to trade a 1.6310/1.6410 range with a bullish bias. I stick with that view so would be flat at current levels, hoping to buy on dips.
Looking at H1 chart, GBPUSD RSI is overbought but MACD is still in BUY signal … the pair will probably consolidate for the moment and there is that 09:30 GMT GBP CPI (YoY) and Core CPI (YoY) coming … that might move the pair, I think
The UK CPI is coming out later today, which should affect the move.
Also, the 61% retrace of the daily downmove (1.6878-1.5835) lies around 1.6477, which is not far from the current price level.
Agreed, stev … GBPUSD resistance @ 1.6476 … 08/12/2009 High