IFX Market Report: Monday 23rd September 2019

The pound retreated from its two-month highs on Friday after the Irish Foreign Minister said that London and the European Union were not close to a Brexit deal. Additionally, a report in the Financial Times indicated Boris Johnson had told colleagues that he wasn’t expecting to reach a “legally operable” deal covering the Irish border at the next meeting of EU leaders.

In recent days the pound had rallied on comments that a new deal was within reach but comments on Friday erased some of these losses. The pound fell 0.6% against the dollar and 0.2% against the euro. Some analysts are predicting that if there is no meaningful progress towards agreeing a deal and the optimism begins to fade, the pound will likely retreat to the $1.20 mark.

GBPUSD opened at 1.2565 and fell across the morning to an early afternoon low of 1.2474 and recovered only slightly to close at 1.2488

GBPEUR opened at 1.1367 and steadily fell to a low of 1.1320. a partial recovery was seen in the afternoon and the pair closed at 1.1346

The US dollar rose against several currencies on Friday to conclude its first positive week in the last three. The gains were prompted by hopes of progress in the US-China trade talks and indications from The Federal Reserve that they would not aggressively lower interest rates. Trade negotiators are set to continue talks that began on Thursday and will hopefully create foundations for high-level discussions in early October.

Analysts have commented that the US economy seems to be doing particularly well in comparison to other global economies affected by protracted supply-chains and tariffs. The dollar index was 0.24% higher and made a weekly gain of about 0.25%. The euro fell 0.2% against the dollar.

EURUSD opened at 1.1054 and declined steadily across the day, reaching a low of 1.1003 shortly before closing.

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