GBPUSD remains slightly positive below its usual level. The Irish bridge gets acceptance if the United Kingdom pays the price. The threat of the EU to use barriers to push the UK towards its terms seems to weigh on Brexit’s optimism, especially as we wait for fresh impulse. Here is the GBPUSD Fundamental Analysis of 27 December, 2019.
27 December, 2019 | AtoZ Markets – The GBPUSD struggles around 1.3000 round-figure as it heads towards the London open on Friday. In doing so, the pair has struggled to extend its recovery since Tuesday.
GBPUSD Fundamental Analysis – 27 December 2019
The optimism surrounding Brexit, after the victory of the Conservatives, seems to appeal to buyers. The latest upside was capped by the article in the UK Times. That signals the European Union’s (EU) readiness to take severe measures to push Britain towards its rules. The article mentions that Brussels is ready to be tough on the United Kingdom by cutting access to vital data flows for British trade. It is also prepared for limiting the future of financial services.
Despite this, reports show that the UK will match pre-crisis wages in early 2020, are something that contributes to the current strength of the quote.
Earlier, GBPUSD benefited from the news that Irish Prime Minister Leo Varadkar supports thinking about the idea of British Prime Minister Boris Johnson’s proposal. That is to build a bridge between Northern Ireland and Scotland if Britain pays for it.
On the other hand, market performance remained restless in the mood for the holiday season. However, the proximity of the US-China phase-one signing seems to have helped to mitigate the risk. Thus, the 10-year US Treasury yields hover around 1.90%, while the S&P 500 Futures and Asian stocks are slightly positive. Investors will keep an eye on trade/political news to find fresh impulse.
US China Trade Deal
Beijing said on Wednesday that it was in close contact with Washington for a signing ceremony for a trade deal. One day after US President Donald Trump said he and Chinese President Xi Jinping would have a ceremony to sign the recently struck agreement. Toshinobu Chiba, chief portfolio manager for fixed income at Nissay Asset Management, said:
“The overnight gains in the dollar were partly erased by dipping Treasury yields after the seven-year note auction. But US-China trade optimism has put a solid floor under the dollar,”
“Anyway, I don’t expect any large moves one way or the other in the markets today. Trade remains weak due to the holiday week.”
Profits at Chinese industrial companies in November rose at their fastest pace in eight months. It broke a three-month downtrend as production and sales accelerated. But broad weakness in domestic demand remains a risk for earnings next year.
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