In the afternoon of June 22, 2016, you, as an analyst of a major investment bank, were asked to give your opinion on the status of the market and make trade suggestions to clients.

a.Given the data provided, state your opinion on the next day (Jun 23)s GBP movements ( e.g. likely up or down), provide one reason to back up your statement.

b.You were tasked to make suggestions on speculative strategy using call or put options. Based on your opinion, make your recommendation (long or short, call or put, currencies to trade) and give one reason for such recommendation.

A B D E F Date 15-Jun-16 16-Jun-16 17-Jun-16 20-Jun-16 21-Jun-16 22-Jun-16 23-Jun-16 24-Jun-16 27-Jun-16 28-Jun-16 29-Jun-16 30-Jun-16 1-Jul-16 4-Jul-16 5-Jul-16 6-Jul-16 Official 1-mon Bank Rate UK (percent per annum) Forward exchange rate, 1 month, US$/Sterling Spot exchange rate, Euro/Sterling Spot exchange rate, US $/Sterling 0.5 1.4201 1.2634 1.4196 0.5 1.4069 1.2617 1.4064 0.5 1.4299 1.2709 1.4293 0.5 1.4699 1.296 1.4694 0.00534198 0.5 1.4674 1.3018 1.467 0.00527403 0.5 1.4692 1.3018 1.4687 0.00534214 0.5 1.4801 1.3039 1.4798 0.00520374 0.5 1.3631 1.2254 1.3621 0.00573783 0.5 1.3159 1.1986 1.3152 0.0055349 0.5 1.3325 1.2054 1.3322 0.00522632 0.5 1.3526 1.2177 1.3523 0.00522295 0.5 1.3432 1.2081 1.3429 0.00522451 0.5 1.3274 1.192 1.327 0.00530294 0.5 1.3291 1.1929 1.3287 0.5 1.3052 1.175 1.3048 0.5 1.289 1.1639 1.2885 A B D E F Date 15-Jun-16 16-Jun-16 17-Jun-16 20-Jun-16 21-Jun-16 22-Jun-16 23-Jun-16 24-Jun-16 27-Jun-16 28-Jun-16 29-Jun-16 30-Jun-16 1-Jul-16 4-Jul-16 5-Jul-16 6-Jul-16 Official 1-mon Bank Rate UK (percent per annum) Forward exchange rate, 1 month, US$/Sterling Spot exchange rate, Euro/Sterling Spot exchange rate, US $/Sterling 0.5 1.4201 1.2634 1.4196 0.5 1.4069 1.2617 1.4064 0.5 1.4299 1.2709 1.4293 0.5 1.4699 1.296 1.4694 0.00534198 0.5 1.4674 1.3018 1.467 0.00527403 0.5 1.4692 1.3018 1.4687 0.00534214 0.5 1.4801 1.3039 1.4798 0.00520374 0.5 1.3631 1.2254 1.3621 0.00573783 0.5 1.3159 1.1986 1.3152 0.0055349 0.5 1.3325 1.2054 1.3322 0.00522632 0.5 1.3526 1.2177 1.3523 0.00522295 0.5 1.3432 1.2081 1.3429 0.00522451 0.5 1.3274 1.192 1.327 0.00530294 0.5 1.3291 1.1929 1.3287 0.5 1.3052 1.175 1.3048 0.5 1.289 1.1639 1.2885