Today, for the first time in more than a decade, MPs will be voting to choose John Bercow’s successor. The eight candidates running will surely have their work cut out, maintaining order in the up and coming Brexit debates. The main event for the Pound in the week ahead will probably be the Bank of England (BOE) meeting on Thursday, Services PMI data on Tuesday, and the results of opinion polls in the run-up to the December general election. The latest set of opinion polls taken, continues to show increased odds of a Tory leadership post-December election. This morning we have seen GBP/USD hold on to recovery gains opening at around 1.2940. The GBP gains at the end of last week were in part due to the third consecutive month of weak PMI data out of the US.
On the other hand, news concerning the US-China trade deal has been mixed as the United States’ President Donald Trump’s optimism surrounding the phase one deal fails to conquer the Commerce Secretary Wilbur Ross’s doubts over any further relationships. The US-China trade optimism will likely bolster EUR/USD, yielding a rise to the 200-day average at 1.1195. The pair is currently trading at 1.1170, representing marginal gain after it dipped to a low of 1.1128 during the US trading hours on Friday after the US Nonfarm Payrolls bettered estimates.
The GBP/EUR exchange rate is trading at around 1.1580 this morning after rising 0.87% last week. If the exchange rate can successfully rise above 1.1661, the October 17 high, it will probably confirm a continuation of the bullish trend higher to a target at 1.1800 initially, and then perhaps 1.1915.
The main drivers of the Euro in the week ahead are the EU’s official winter economic forecasts on Thursday, ahead of the Eurogroup meeting of finance ministers, and retail sales data out on Wednesday. The EU’s previous official forecast for euro area GDP growth, released in the summer, estimated growth of 1.2% in 2019 - unchanged from the previous estimate - a slightly lower 1.4% in 2020. The GDP forecast for the whole of the EU stayed unchanged at 1.4% in 2019 and 1.6% in 2020 in the summer. Substantial deviations in the winter release from these estimates are not expected but might result in fluctuations in the Euro.
At the time of writing;
GBPUSD – Trading below 1.30 at 1.2932
GBPEUR - Trading below 1.16 at 1.1584
EURUSD - Trading at 1.1163
Special Notes: The figure is based on the live mid-market rate, correct as of 08:15 GMT on 04/11/2019, 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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