UK election on 12th December

30th October 2019 Market Update

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🇬🇧 GBP –  The House of Commons accepted Johnson’s motion for a December 12th election at the 2nd time of asking yesterday. The motion will still need to be agreed by the House of Lords today/tomorrow. Sterling remained relatively flat signalling that the UK holding a General Election by the end of the year was largely anticipated by the markets.
There is no data of note to be released from the UK today.

🇪🇺 EUR – The euro is mainly being dictated by the other majors at present, Tusk seems to have put his foot down with the UK over Brexit, and stated yesterday that ‘the latest Brexit delay will more than likely be the last one.’ The EU are also starting to put some ideas together about how to fill the void that the UK will leave in the EU after Brexit. One report said that Germany and other major economies will have to double their yearly contributions to bridge the gap.
From the EU today we have French Consumer Spending and German Unemployment Change.

🇺🇸 USD –  The dollar remained largely muted yesterday as all eyes seemed to be on the Fed’s Interest Rate decision this evening. The Fed are expected to drop the rate by 25bp and it has been reported that there is an 86% chance of this happening which will be priced into the markets. Powell is likely to emphasise the fact that he and other Federal Reserve members are willing to continue to cut rates through 2020, but this is of course dependent on the ongoing state of the US economy.
Other than the FOMC Meeting and Fed Interest Rate decision we have US preliminary GDP and Consumer Spending today.

 

Summary:

GBP: Pound unmoved following election call
USD: Markets wait for rate decision
EUR: German unemployment in focus


 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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