Back and forth continues in US-China trade war
Friday 8 November, 2019
Daily Currency UpdateGBP - British PoundEarlier in the week we were talking about how the US-China trade truce looked to have another setback with a deal being rolled into December. However events have shifted once again showing the fluidity of the negotiations. Most recently it now looks like China has agreed to lift tariffs mirroring the US. Whilst there are a lot of details still to be hashed out, including exactly where to hold the ceremonial signing ceremony marking the new deal, currencies and equities are being dominated by every update, twist and turn. Much to the delight of President Donald Trump, US equity markets all hit new highs yesterday as he tweeted "Stock Market up big today. A New Record. Enjoy!".
Key MoversThe Bank of England meeting yesterday took the spotlight for the pound and whilst the monetary policy committee voted to keep interest rates on hold at 0.75% it wasn't enough to stop sterling tumble to two week lows against the USD. This move was driven by dissenters Michael Saunders and Jonathan Haskel who actually voted for a cut in rates by 25 bps. As mentioned previously here though the Bank of England will only take the spotlight momentarily before attention moves back towards Brexit. A Reuters poll earlier in the week caught the eye of many observers as investors forecast that a Tory majority in the December 12th election could mean a 3% rally for sterling, whilst a Labour majority could mean a 2% drop for the currency. Looking towards next week it ramps up once again for data with UK GDP numbers, a Kiwi interest rate decision, UK + US inflation numbers and UK retail figures all set to be released.
- GBP/USD: 1.2800 - 1.2890 ▼
- GBP/EUR: 1.1560 - 1.1650 ▼
- GBP/AUD: 1.8550 - 1.8770 ▼
- GBP/NZD: 2.0010 - 2.0230 ▼
- GBP/CAD: 1.6850 - 1.6980 ▼