25th June 2019 Market Update
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🇬🇧 GBP – There was no data of note released yesterday from the UK yesterday, and there is nothing of note. As a result, sterling stuck to its usual ranges across the course of the day until yesterday evening when the BBC released a surprise interview with Boris Johnson. He set out his Brexit plan, renewing his commitment to leave on 31st October – deal or no deal. He also stated that Theresa May’s deal was “dead” and that he felt the Irish backstop could be renegotiated, as he felt the political landscape had fundamentally shifted since the 29th March. Sterling initially dropped on Johnson’s commitments, but has then recovered to yesterday’s trading range.
🇪🇺 EUR – The German IFO came out in line with market expectations yesterday morning, having minimal impact on the exchange rates. There was nothing else of note released from the eurozone yesterday, and nothing of significance is being released today.
🇺🇸 USD – Like the UK, nothing of significance was released from the US yesterday. Despite this, across yesterday evening and into Tuesday morning the dollar has weakened amid rising expectations of interest rate cuts by the Federal Reserve. As a result, the dollar index fell to its lowest levels in more than three months. According to Fed fund futures, there is now a 40 per cent chance of two rate cuts before the end of this year. This afternoon consumer confidence is being released, with the reading expected to drop off from last month. Fed Chair Powell is also speaking this evening, at the Council on Foreign Relations in New York.
GBP: Johnson’s BBC interview surprises pound
EUR: The euro holds firm in the dollar’s plight
USD: Dollar weakness amid rising rate cut expectations
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