For the last three and a half years, since the Brexit referendum, the pound has been flying both ways on a swing. Now he’s moving fast up again, setting multi-month highs. Why? The main trade idea is the next elections to the British Parliament. So, what’s the big deal? They are not the first and not the second ones, are they?
GBP/USD Day Chart
The difference between these elections is that according to the polls, Boris Johnson and his Conservative Party will win them with a good separation from the Labour Party. This means that they will be able to take and finally withdraw from the EU.
But this is bad for the UK economy, isn’t it? Yes! It’s bad compared to staying in the European Union. However, it is much better than the uncertainty that persists for several years, which has already bothered everyone.
Investors should see either one or the other option, but not the intermediate solutions that now dominate the market. Manufacturers want to clearly understand the rules of the game. Will they have to pay for the import of components from the EU and whether their products will be subject to export duties when exported there. And there are a lot of such questions, to which everybody is waiting for a clear and final answer.
The Euro continues to grow on the second day and is again close to the level of 1.11. No strong movements are expected before the results of the European Central Bank meeting on Thursday are announced.
Global stock indices have fallen since morning. Then they turned sharply and went upwards. Due to what? Everybody is sick and tired of the topic of negotiations between the USA and China. The next trade duties were to be introduced on December 15. This is a day off and a big gap could have happened on Monday. However, it was reported that Trump’s administration is postponing this increase, as the U.S. and China are close to signing a new trade agreement.
What awaits us today?
14.30 U.S. consumer price index for November
16.30 Changes in petroleum product inventories in the US over the past week
20.00 Summary of economic forecasts from the US Federal Open Market Committee
20.00 FRS decision on interest rate
20.00 FRS comments on monetary policy
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