IFX Market Report: Wednesday 26th June 2019

The pound fell against the dollar yesterday after hitting a one-month high as the risks of a no deal Brexit continued to weigh the currency down. After receiving support from the Bank of England’s meeting last week, the pound had been performing well against a weakened dollar, but traders have now moved back to being concerned about a no deal Brexit. The pound dropped nearly a cent against the dollar and 0.4% the euro.

Both potential future Prime Ministers are hoping to renegotiate Theresa May’s withdrawal deal, but front-runner Boris Johnson has committed to leaving by the 31st of October regardless of whether a new deal can be struck.

GBPUSD opened at 1.2769 and fell across the day, reaching a low of 1.2687 shortly after closing

GBPEUR opened at 1.1206 and fell sharply in the first half of the day, hitting a low of 1.1162 and only regained a little ground later in the afternoon to close at 1.1168.

The dollar fell against most major currencies on Tuesday and hit a three-month low against the euro as the expectations of multiple rate-cuts this year continued. Increased inflammatory rhetoric between President Donald Trump and the Iranian regime have sparked safe haven buying of the yen, which reached its highest level against the dollar since January. The dollar fell 0.14% against the yen and was also slightly weaker against the Canadian and New Zealand dollars.

Investors are now focused on whether President Donald Trump and Chinese President XI Jinping will call a truce on their trade war at the G20 summit later this week. A truce is the best that is being hoped for as some kind of break-through seems extremely unlikely at this stage.

EURUSD opened at 1.1395 and fell very steadily across the day, reaching a low of 1.1365 shortly after closing

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