Forex traders have much to look ahead to this week, with GBP and USD hitting relative lows and highs.

The pound fell to its lowest in nearly three years against the dollar, which hit its highest in two months.

The pound has come under renewed pressure on the increasing fears of a ‘hard Brexit’, which led to its fresh 28-month low. UK Prime Minister Boris Johnson has ramped up preparations for a no-deal withdrawal from the EU, with around three months remaining. 

This is in contrast to what the prime minister had been claiming during his leadership campaign, saying that there was only a “one in a million” chance of the UK leaving the EU without a transitional deal, including his claim that the deal Theresa May had drawn up was “dead”, with no time to negotiate a new one.

The pound fell against all of its group-of-10 currencies, being the worst performer this month, while investors brace themselves for the risk of a no-deal Brexit, in addition to a general election. 

Sterling weakness aside, traders are also eagerly awaiting the upcoming Federal Reserve and the Bank of Japan policy meetings, which both take place later this week.

By 3:50 AM ET (0750 GMT), the pound slid 0.4% to $1.2339, the lowest since March 2017. It weakened 0.3% to 90.15 pence per euro, pushing the euro above 90 pence for the first time in three weeks.

Meanwhile, the US dollar index, hit 97.828, on the back of stronger-than-expected gross domestic product data for the second quarter, and ahead of what is expected to be the first US interest rate cut since the financial crisis this week. 

According to GDP figures, the US economy appears to have grown at an annualised pace of 2.1% in the three months to June, a less worrying slowdown than had been feared.

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