IFX Market Report: Wednesday 10th July 2019

Yesterday the pound fell to an almost two-year low against the US dollar despite a parliamentary vote narrowly passing surrounding the collapsed Northern Ireland Executive which was aimed at stopping the next UK Prime Minister guiding the UK out of the European Union without an agreement in place.

The two candidates campaigning to take over as the next leader of the Conservatives and UK Prime Minister, Boris Johnson and Jeremy Hunt took part in a TV debate in which Johnson, still the front runner, did not rule out closing parliament in order to ensure the UK leave the EU by the 31st of October.

GBPUSD opened at 1.2481 and hit a low of 1.2448 close to midday. The pair then recovered slightly in the afternoon to close at 1.2461

GBPEUR opened at 1.1135 and fell to a low of 1.1110 in the early afternoon, a recovery in the afternoon was short lived before a further drop saw the pair close at 1.1119.

The US dollar was slightly higher against its key rivals on Wednesday up to 97.55, the highest since June 19th. The greenback has more to gain from possible comments from Jerome Powell’s testimony to congress which will happen across today and tomorrow. Analysts are listening for the extent to which the comments will be dovish.

The euro fell slightly against the dollar after earlier hitting a three-week low. Traders are concerned that the new head of the European Central Bank, Christine Lagarde, will begin easing monetary policy faster than the US Federal Reserve. This will cause the euro to drop further against the dollar in the next couple of months.

EURUSD opened at 1.1209 and was mostly unchanged on the day, closing at 1.1207 after a very slight dip in the morning down to 1.1197.

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