IFX Market Report: Tuesday 29th October 2019

The pound made some gains against a weaker dollar yesterday as investors awaited whether UK parliament would approve a general election for December 12th as per the government’s proposal.

However, this motion was defeated at around 1900 yesterday as it requires a two-thirds majority in order to pass and the opposition Labour Party abstained.

The pound was unmoved by the government’s loss as political analysts believe that today the government will try again to call an election using legislation that only requires a simple majority, meaning support from the opposition will not be as necessary. The government may have to concede holding an election on December 9th instead of December 12th.

Although uncertainty remains the pound is enjoying the receding fears of a no deal scenario after the EU agreed to an extension until the 31st of January.

GBPUSD opened at 1.2854 and dropped early in the morning before gaining steadily across the rest of the day to close almost unchanged at 1.2856.

GBPEUR opened at 1.1584 and fell to a late morning low of 1.1560 before gaining steadily across the afternoon to close at 1.1589

The US dollar fell yesterday alongside its safe-haven rivals as optimist for the trade talks between the US and China increased risked appetite. The dollar index fell 0.07% while trade sensitive currencies like the Australian dollar rose 0.25%. Investors are still awaiting the Federal Reserve’s meeting this week in which they expect a 0.25% drop in interest rates to be agreed.

EURUSD opened at 1.1092 and after a volatile day with a stronger afternoon, the pair closed slightly higher at 1.1098

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