Foreign Exchange Report - Aug 2019
The EUR/USD exchange rate opened trading at around 1.1150, strengthening its highs after further developments in U.S-Sino trade tensions pushed down the Dollar and U.S. yields. The pair await German IFO business climate data, which is due to be published soon.
The Pound-to-Dollar pair was also seen consolidating its gains, trading below the 1.2300 mark. The rate was impacted by the uncertainty surrounding the possibility of a no-deal Brexit, as the UK prepares to leave the bloc on October 31. The pair was also effected by burgeoning U.S.-Sino trade disputes.
Over the past week, Sterling recorded the best performance among all major currencies, posting increases against the world’s nine most liquid currencies.
Against the Euro, the greenback, and other major currencies, the Pound hit three-week highs. Analysts however, are doubtful whether the rebound seen following Prime Minister Boris Johnson’s visit in France may be prolonged.
On the heels of news that French President Emmanuel Macron and Chancellor of Germany Angela Merkel may be open to discussing the possibility of making amendments to the Northern Ireland backstop, the Pound rallied.
Following these developments, the GBP/EUR pair hiked over a percent, hitting a three-week high to 1.1074, before paring gains at 1.1029. Against the U.S. Dollar, the Pound jumped to 1.2252, after which is pared back gains to 1.2228.
Nonetheless, foreign exchange experts remain sceptical as to how much these gains can be sustained, following the news.