IFX Market Report: Thursday 24th October 2019

The pound was stable against the dollar yesterday as markets continue to wait on what decision the EU will make in terms of granting an extension to the UK’s Brexit deadline. EU member states delayed the decision yesterday, but European Council President Donald Tusk said he was recommending that EU leaders back the UKs request.

The pound made some gains against the dollar late on Wednesday, up 0.37% against the dollar and 0.28% against the euro. Prime Minister Boris Johnson has said that he will push for an election before the end of the year if the EU grants an extension. Opposition to the government’s withdrawal timetable has made an October 31st exit unlikely though Labour Party leader Jeremy Corbyn has not indicated what his party would do in the case that the EU refuse to grant an extension.

GBPUSD opened at 1.2864 and made small gains across the day, closing slightly higher at 1.2874

GBPEUR opened at 1.1564 and performed similarly, closing marginally higher at 1.1576

The dollar index was down 0.09% yesterday, gaining slightly as a safe haven in the face of Brexit uncertainty. However, these gains were erased in the afternoon with both the Japanese yen and Swiss franc were slightly lower against the dollar. The European Central Bank will shortly be deciding on interest rates which is widely expected to be held firm, most analysts do not expect a change in policy but are looking for hints of disagreement within the bank over stimulus measures.

Elsewhere, the price of bitcoin fell yesterday to a five-month low after Facebook CEO Mark Zuckerberg cast doubts on whether Facebook’s cryptocurrency, Libra, would be able to work. Appearing before US Congress he implied the project may never work. Libra was intended to be a digital currency backed by real assets in order to create trust and stability. The announcement continued the downward trend in Bitcoin and the wider crypto space in the second half of this year.

EURUSD opened at 1.1125 and fell to a late morning low of 1.1110 before recovering most of this ground in the afternoon to close at 1.1122

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