IFX Market Report: Wednesday 27th November 2019

The pound fell on Tuesday as a second opinion poll showed that the Labour Party has slightly closed the gap between them and the Conservative Party. At one point the gap was as wide as 18 points but a poll yesterday put this down to 11 points in one week. Other polls show the gap has narrowed to single digits. The pound fell 0.4% against the dollar and 0.5% against the euro.

The currency continued to drop in the evening as the UK’s finance minister announced that the Conservative Party would hold an inquiry into Islamophobia within its ranks. Analysts believe the pound remains strong on the probability of a Conservative majority ending the deadlock on Brexit.

GBPUSD opened at 1.2884 and fell steadily across the day, hitting a low of 1.2843 and closing only slightly higher at 1.2855

GBPEUR opened at 1.1696 and dropped more sharply to a late afternoon low of 1.1658, closing at 1.1672

The US dollar fells slightly against a basket of currencies on Tuesday as investors remain cautiously optimistic about a trade deal between the US and China. President Donald Trump said the two countries were close to a deal. The movements were muted because analysts feel as though this point in negotiations has been approached before. If both countries cannot reach a deal by December 15th then more tariffs on Chinese goods will come into place.

Data yesterday showed that the US goods trade deficit fell in October, this has been blamed on the White House’s “America First” policy. The dollar index was down 0.08%. The Japanese yen also made gains against the dollar, up 0.12%.

EURUSD opened at 1.1015 and reached an early afternoon high of 1.1023 before dropping in the late afternoon to close almost unchanged at 1.1013

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