GBP moved away from many-month lows
GBP moved away from many-month lows
Written by: PaxForex analytics dept - Wednesday, 07 August 2019 0 comments
The British pound has a little recouped its losses and held slightly above recent lows, although the currency remains very vulnerable amid investors' fears that the UK is increasingly moving towards an ineffective Brexit.
At the beginning of the week, British media reported that Brussels diplomats, informed after a meeting with the chief European envoy of British Prime Minister Boris Johnson, stated unequivocally that Johnson did not intend to make concessions to the European bloc.
Recall that the new prime minister said that Britain would leave the European Union on October 31 with or without a trade deal.
Michael Gove, the British minister responsible for planning Brexit without a deal, said he was saddened by the fact that the European Union was refusing to resume discussions on a new deal. According to him, the UK remains open for negotiations.
Markets rightly believe that in recent weeks under Johnson the risk of an unsuccessful Brexit increased, and such fears have led the pound to its lowest level in the last two years.
However, yesterday the pound managed to win back part of the losses. On Tuesday, GBP rose by 0.3% against the dollar to $ 1.2175 against the 31-month low of $ 1.2080 reached last week. It rose to $ 1.2209 at the beginning of the session amid falling US currency.
In relation to the euro, the pound recovered from an almost 2-year low of 92.49 pence to 91.94 pence, which is 0.3% higher compared to the previous day.
In anticipation of the Brexit deadline in late October, we expect the EURGBP to remain volatile and possibly more so than previously thought. Financial markets are very sensitive to Boris Johnson’s too direct approach to solving Brexit’s problem, and on the eve of October, this may mean that the euro / pound will drift to increase.
Among other events, we note the New Zealand regulator's cut in interest rates by 50 basis points to 1.00%. Markets expected a decline of 25 basis points.
The Reserve Bank of New Zealand refrained from hawking comments on the regulator's further monetary policy. Qiwi dollar rose from 0.65452 to 0.64359 US dollar after the publication of news on rates. At the time of writing, NZD was down 1.10% to $ 0.6453.
Forex fundamental analysis >
Forex trading recommendations:
EURUSD: Buy. Entry point – 1, 1208. Take profit – 1, 1227. Stop Loss – 1, 1146.
GBPUSD: Buy. Entry point– 1, 2148. Take profit – 1, 2181. Stop Loss – 1, 2092.
AUDUSD: Buy. Entry point – 0, 6721. Take Profit – 0, 674. Stop Loss – 0, 6689.
At the beginning of the week, British media reported that Brussels diplomats, informed after a meeting with the chief European envoy of British Prime Minister Boris Johnson, stated unequivocally that Johnson did not intend to make concessions to the European bloc.
Recall that the new prime minister said that Britain would leave the European Union on October 31 with or without a trade deal.
Michael Gove, the British minister responsible for planning Brexit without a deal, said he was saddened by the fact that the European Union was refusing to resume discussions on a new deal. According to him, the UK remains open for negotiations.
Markets rightly believe that in recent weeks under Johnson the risk of an unsuccessful Brexit increased, and such fears have led the pound to its lowest level in the last two years.
However, yesterday the pound managed to win back part of the losses. On Tuesday, GBP rose by 0.3% against the dollar to $ 1.2175 against the 31-month low of $ 1.2080 reached last week. It rose to $ 1.2209 at the beginning of the session amid falling US currency.
In relation to the euro, the pound recovered from an almost 2-year low of 92.49 pence to 91.94 pence, which is 0.3% higher compared to the previous day.
In anticipation of the Brexit deadline in late October, we expect the EURGBP to remain volatile and possibly more so than previously thought. Financial markets are very sensitive to Boris Johnson’s too direct approach to solving Brexit’s problem, and on the eve of October, this may mean that the euro / pound will drift to increase.
Among other events, we note the New Zealand regulator's cut in interest rates by 50 basis points to 1.00%. Markets expected a decline of 25 basis points.
The Reserve Bank of New Zealand refrained from hawking comments on the regulator's further monetary policy. Qiwi dollar rose from 0.65452 to 0.64359 US dollar after the publication of news on rates. At the time of writing, NZD was down 1.10% to $ 0.6453.
Forex fundamental analysis >
Forex trading recommendations:
EURUSD: Buy. Entry point – 1, 1208. Take profit – 1, 1227. Stop Loss – 1, 1146.
GBPUSD: Buy. Entry point– 1, 2148. Take profit – 1, 2181. Stop Loss – 1, 2092.
AUDUSD: Buy. Entry point – 0, 6721. Take Profit – 0, 674. Stop Loss – 0, 6689.