IFX Market Report: Monday 2nd December 2019

The pound remained close to the $1.29 mark on Friday as analysts are not predicting much further movement between now and the 12th December election. The pound gained 0.2% on the day and will likely make further gains if current polling predictions come to pass. Three years of uncertainty could end with Boris Johnson’s Conservative government finally being able to pass the withdrawal agreement.

However, analysts have said that the pound will not make much further gains beyond its current state because of the uncertainty of the ongoing trade negotiations that the UK and EU will have to conclude within a year. This will re-open the risks of a potential no-deal scenario as well as other less market-friendly outcomes.

GBPUSD opened at 1.2914 and fell to an early low of 1.2885 and then jumped sharply in the late afternoon to close at a high of 1.2938

GBPEUR opened at 1.1729 and was steady for most the of the day, making slight gains in the afternoon to close at a high of 1.1741

The dollar was near a seven-year high against the Japanese yen on Friday as strong economic data reduced bets that interest rates would be cut again. The optimism from the US-China trade talks also appears to be ongoing. The dollar gained 0.7% against the yen across last week, with lighter trading due to the Thanksgiving closure of US markets.

It is unclear whether Trump’s support of Hong Kong protestors will have any bearing on trade negotiations but domestically The Federal Reserve highlighted strength in the labour market and a potential reverse in business investment.

Elsewhere, the Australian dollar was slightly weaker for the week, but an interest rate cut is looking unlikely according to market bets. The New Zealand dollar was also slightly higher for the week, benefitting from increased risk appetite.

EURUSD opened at 1.1011 and fell to an early afternoon low of 1.0983 before recovering sharply to close at 1.1019

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