IFX Market Report: Tuesday 25th June 2019

The US dollar weakened slightly against a basket of currencies on Monday as traders started betting that the US Federal Reserve may lower interest rates more than once in 2019. This has been the main concern for the dollar, which has caused a fall in the dollar index of 0.24% yesterday and 1.57% in the last week. The dollar also suffered as a result of the US placing new sanctions on Iran in response to Tehran downing a US drone last week. Investors are at least hoping for a truce in the US-China trade war at the G20 summit next week rather than any further escalation.

EURUSD opened at a 1.1374 and was very steady across the day, the euro made marginal gains by the end of the session closing at 1.1391.

The pound remained close to the highs it achieved late last week against the US dollar as traders remain unwilling to take large bets on the pound. The Bank of England’s “less dovish than most” comments combined with the ongoing leadership contest have meant that substantial movements in the pound will be driven by news elsewhere. The pound touched a one-month high against the dollar earlier in the day but against the euro it remained close to its five-month lows. Markets remain overall heavily short the pound versus the dollar.

GBPUSD opened at 1.2725 and briefly gained in the morning before losing ground again in the early afternoon. The late afternoon saw a slow rise to close slightly higher at 1.2736

GBPEUR opened at 1.1185 and fell to a low of 1.1164 by the early afternoon. The pair recovered most of this ground in the late afternoon to close at 1.1182

The Japanese yen was steady after reaching a one-month high on Friday as risk-averse investors took up positions in the safe-haven currency. Elsewhere the world’s biggest cryptocurrency, bitcoin, has risen almost 200% this year as Facebook’s plan to launch Libra digital coin has created speculation that digital currencies are now going to be more widely used. Among digital currencies, bitcoin rose 1.44% against the dollar.

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