IFX Market Report: Tuesday 9th July 2019

The pound moved lower against the dollar yesterday amid poor economic data and the continued expectation of a cut in interest rates, this was also exacerbated positive US jobs data. The uncertainty around Brexit is gradually dragging the pair downwards as the deadlines to choose a Prime Minister and a method by which to leave the EU are approaching.

The pound appears to be close to breaking through the $1.2500 barrier which is seen by some analysts as a psychological barrier.

If Sterling drifts below this point it might set the stage for a longer spell of depreciation. Positive economic data might limit these losses.

GBPUSD opened at 1.2527 and hit a low of 1.2503 but recovered slightly to close at 1.2517

GBPEUR opened at 1.115 and reached a high of 1.1165 in the late morning before a fall and subsequent recovery in the afternoon saw the pair close at 1.1161

The dollar made strong gains against some of major rivals on Friday and continued to hold these levels on Monday. The dollar index gained 0.18% for the day but investor confidence has deteriorated in the month of July so far. Most are quite sceptical of any quick resolution of the trade tensions between the US and China with passing comments from President Donald Trump on Twitter now failing to convince investors to part with their reserves.

The euro fell slightly against the dollar, losing 0.08% with a European Central Bank Governing Council member saying that a more accommodative policy was needed more than ever, indicating the bank could start asset purchases again if needed.

EURUSD opened at 1.1231 and dropped slightly across the day, closing at a low of 1.1216

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