Sterling Soars to 6-Month Highs Against the Euro

Xe Corporate Europe

November 18, 2019 3 min read

Sterling opened trading on Monday by posting 6-month highs against the Euro and 2 ½ week highs on cable to give fresh hopes of a test this week at the ever significant 1.30 level against the US Dollar. This was largely down to the Brexit party announcing that they will stand down from another 43 seats, not held by the conservatives to boost the Tories chances of stealing key seats from the labour party. Quite simply, any positive news for the Tories will see the pound rise as it increases the chances of Boris getting a majority in parliament and more certainty on the outcome of the GE. Any momentum lost by the Tories might suggest a hung parliament is the more likely outcome and one thing the markets hate is uncertainty.

The top negotiators from the US and China talked again this weekend and the official statement that came out was that talks were ‘constructive’ regarding each sides concern. Both parties agreed close communication is key. Last week we saw China remove curbs on poultry imports from the US and trusted reports suggest Trump has backed the agreement by allowing US companies to continue to do business with Huawei Technologies.

Other key news from last week was that Germany surprisingly just missed out on a technical recession. Its growth was expected to retract for a second successive quarter but instead narrowly avoided it by posting a 0.1% GDP growth in Q3. We now look to Friday for the key services and manufacturing data from Germany.

Light on the data in general this week but we do see both the ECB and the FED speak which might give fresh indications on the global outlook which can cause volatile moves but we don’t expect any huge volatility this week. All eyes still firmly on the GE campaigns.

At the time of writing:

GBPUSD - Trading above 1.29 at 1.2954

GBPEUR - Trading above 1.17 at 1.1709

EURUSD - Trading below 1.11 at 1.1064

Special Notes: The figures are based on the live mid-market rates, correct as of 08:30 GMT on 16/11/2019, and are provided for indicative purposes only. Live mid-market rates are not available to consumers and are for informational purposes only. The rates we quote for money transfer can be selected via the page on our website ‘Live Money Transfer rates’.

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