IFX Market Report: Thursday 7th November 2019

The pound was steady on Wednesday as investors calculated the currency risks associated with the general election and how it will impact the UKs ability to exit the EU before January 31st. Traders are also waiting to see if today’s Bank of England meeting might reveal any insight on the impact of Brexit on the British economy. No interest rate cuts are predicted in the near term.

The UK is having an election on the 12th December which would leave little time between then and the 31st of January to negotiate an ongoing trade relationship with the EU, which negotiators have said will be tricky.

The 5% that the pound gained through the month of October might begin to slip away again as anxieties rise, which will be exacerbated by signs that the Conservative party does not win a majority.

GBPUSD opened at 1.2881 and after a steady morning, the pair fell slightly to close at a low of 1.2870

GBPEUR opened at 1.1628 and was almost completely unmoved on the day, closing at 1.1623

The dollar fell 0.2% against the Japanese yen and other currencies on Wednesday as investors were seeking clarity on US-China trade negotiations. The dollar index was 0.1% down on the day. US economic data has been better than expected this week which has eased any concerns over further rate cuts. Surveys released yesterday showed an improvement in business sentiment between September and October, boding well for the dollar.

The euro fell slightly against the dollar on Wednesday amongst trade uncertainty but earlier in the day the pair had made gains on the back of German industrial data showing orders had risen by more than expected in September, giving some hope for the heavily exporting economy of Germany.

EURUSD opened at 1.1078 and closed very slightly lower at 1.1073 having reached a high of 1.1091 in the early afternoon

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