IFX Market Report: Friday 13th September 2019

The pound made gains against the dollar on Thursday but lost ground against the euro as the single currency enjoyed a rebound after the European Central Banks stimulus package announcement. The bank cut its deposit rate by 10 basis points and announced a bond purchase programme of 20 billion euros a month starting from November. The euro rose 0.3% against the pound.

Against the dollar, the pound gained 0.2% and stayed near the high it reached on Monday when no-deal Brexit fears receded, and economic data came in stronger than expected.

This morning the pound has jumped even further on rumours that the largest party in Northern Ireland might be willing to accept some European rules after Brexit, a possible compromise on the Irish Backstop issue that prevent Theresa May’s withdrawal agreement from gaining parliamentary approval. The pound has gained 4% against the dollar in eight days.

GBPUSD opened at 1.2322 and slipped to a brief low of 1.2289 before jumping to a high of 1.2361 shortly after closing. This morning it has risen sharply to a high of 1.2461

GBPEUR opened at 1.1186 and dropped steadily across the day, with a brief midday jump to 1.1243. The pair quickly fell back to close at 1.1154

The dollar made gains yesterday as data showed that underlying consumer prices had increased in August, their largest gain in a year. However, this is unlikely to prevent a Federal Reserve rate-cut next week. President Donald Trump welcomed China’s decision to exempt certain US anti-cancer drugs and other goods amongst its tariffs. The dollar was up 0.31% against its safe-haven rival the Japanese yen.

US Retail sales data is due later today.

EURUSD opened at 1.1021 and gained steadily across the day, with a brief midday drop down to 1.0934 followed by a swift recovery to close at a high of 1.1067

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