Daily Currency Update

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US election debate jolts markets

GBP - British pound

The pound held steady for parts of Tuesday however slid on the back of BoEs Bailey suggestion that negative interest rates may be ruled once again. On the flip side, he said they also have the quantitative easing option in the armoury, should they need it. It seems the BoE committee aren’t singing from the same hymn sheet, as BoE Ramsdens comments regarding 0.1% being the UK optimal interest rate sent sterling surging earlier in the week. Bailey gave a speech to Belfast University where he revealed the UK economic activity was down 7-10% since September.

Majority of investors are fixated on the final stage of Brexit discussions, which restarted yesterday and there are still a number of areas of disagreement. According to the latest headlines, Brussels rebuffed new UK proposals on state subsidies. Monday morning sees the release of UK Manufacturing PMI, which will likely leave the market unchanged, despite the figure posted.

Key Movers

The major global event on Tuesday is non-other than the US presidential election. The US Dollar sold off for the majority of the day before the debate, however, began to hold towards market close. It was an extremely chaotic event, with both sides interrupting consistently. The 3 main talking points were taxes, coronavirus and the economy. Post-debate polls suggested that neither side put their best foot forward and neither showered themselves in glory. It was more of a case of insulting each other, than saying anything substantial, therefore creating a worrying tone in the market. Biden is still the bookies favourite, but the odds have been slashed over the coming weeks. This will go right down to the wire, with the US Dollar soaring on the back of a Trump win, and likely sliding on a Biden result.

Expected Ranges

GBP/USD: 1.2750-1.2940 ▼

GBP/EUR: 1.0875-1.1020 ▼

GBP/CAD: 1.7070-1.7260 ▼

GBP/AUD: 1.7860-1.8080 ▼