January 29, 2020 — 3 min read
The biggest news to come out for the UK yesterday was Boris Johnson giving the Chinese tech firm, Huawei the go-ahead to develop the UK’s 5G network. Eyebrows were raised at this decision as it could put the Johnson-Trump relationship under pressure; with Trump and his administration giving multiple warnings about the security breach to shared intelligence that could follow. The Lib Dem party looked to follow with a tweet suggesting Johnson was ‘ignoring human rights.’ However, multiple security firms have come forward to state that this shouldn’t be the case as well as UK’s Department for culture, media, and sport ensuring the core functions will be kept separate from Huawei. Trump and Johnson will next meet in two weeks to discuss the US-UK trade deal, with this sure to be on the agenda.
Given the relative strength of the dollar at the moment to the pound, we saw GBPUSD drop below 1.30 momentarily yesterday, to then recovering at 1.3012 today. The same reasons continue to persist for the dwindling pound with uncertainty around a potential rate cut tomorrow as well as crashing out of the EU without a deal, come deadline day on Friday.
The greenback received a mixed bag of economic data yesterday - most notably December’s Durable Goods Orders. This came in at 2.4%, well above the 0.5% that was expected. This is generally is a strong indicator for the strength of the dollar, given the generally large investments involved. However, other data released didn’t look so promising, with Capital Goods Orders ex Aircraft falling by 0.9% when it was supposed to remain flat at 0%.
At the time of writing:
GBPUSD – Trading above 1.30 at 1.3007
GBPEUR - Trading above 1.18 at 1.1819
EURUSD - Trading above 1.10 at 1.1004
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