GBP and EUR Well Placed to Advance After US Mid-Term Elections

Cornelia Mascio
Novembre 9, 2018

As reported at 11:24 am (GMT) in London, the GBP/USD was trading lower at $1.30, down 0.22% and well off the session peak of $1.3086. The Irish border issue remains unresolved, little progress has been seen on trade negotiations and terms of the United Kingdom remaining within the EU's customs union post-Brexit, and the skeletons of any kind of a plan have yet to be seen, but London markets are remaining hopeful that a plan for the upcoming European divorce will see a satisfying resolution in time for the final Brexit date next March.

Observers suggest this will likely lead to political deadlock in Washington and - most importantly for United States dollars investors - it could prevent President Donald Trump from pushing through any more tax cuts or other fiscal policies.

Looking ahead to the second half of the week, we could see the GBP/USD exchange rate punch even higher by the end of the week as the United Kingdom publishes its latest GDP figures. According to Reuters sources, the United Kingdom and European Union are hoping for a breakthrough by Friday, which would allow the two parties to provide an update by Friday and still hold a summit by the end of the month.

GBP, which has been most sensitive to Brexit developments, is now well placed to advance further despite comments by Irish Prime Minister Leo Varadkar suggesting that the chances of a withdrawal agreement this month are fading, while next month remains a possibility.

Headlines on the progress of Brexit negotiations have made the pound increasingly jumpy. Little data of note is slated for the economic calendar for today resulting in GBP traders gearing up for the UK's GDP reading, due tomorrow.

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