GBPUSD stops Friday’s decline, as the top 10 polls show the Conservatives are leading the race in the December election. The latest gains of the dollar seem verified as markets enter the key week; the tone of the risk is compressed. Here is the GBPUSD Fundamental Analysis of 09 December, 2019.
09 December, 2019 | AtoZ Markets – GBPUSD takes the bids at 1.3150 as it heads for London’s opening Monday. The quote seems to be encouraging the Conservatives’ head in all polls for this week’s elections in the UK. Another argument in support will be the traders’ profit-booking after the US dollar (USD) recorded broad gains on Friday.
GBPUSD Fundamental Analysis – 09 December 2019
The ICM posts have the least difference in the chances of victory between the ruling Conservatives and the main opposition Labor Party. Nevertheless, the top ten forecasters say the Conservatives will win this election. However, the chances of a Parliament without a majority cannot be denied because of the slim majority of Conservatives in one part of Westminster.
British Prime Minister Boris Johnson’s allegations continue to increase with his latest appearance in the media. That is accepting mistakes in promises about the National Health Care System (NHS) and the borders of Ireland North.
Elsewhere, the quarrel between the United States and China seems to be resuming with China. That is ceasing to use foreign computers and software by the government administration and ignoring the impact of the trade war. Besides, the harsh comments of the governor of Xinjiang Chinese likely increase in protests in Hong Kong.
So, the US 10-year treasury yields stop rising, around 1.84%, while most Asian equities remain low. Given the latest polls showing optimism for the Conservatives, markets can expect a further rise in GBPUSD. However, a slim majority in some parts of Westminster and the decline in the British prime minister’s media profile may offer surprises in this week’s general election.
Fed Cut Rates
The US dollar index changed little at 97.685 at 23:57 ET (03:57 GMT). However, the Federal Reserve is expected to maintain its stable rates on Wednesday this week after its monetary policy meeting. The Fed cut rates three times this year to protect the US economy from a global slowdown.
After the newest rate cut in October, Fed Chairman Jerome Powell said the economy and monetary policy were in a “good position.” And policymakers saw little need to reduce more rates. “I think they feel really good now that they have decided to take a break,” said Tom Porcelli. He is chief economist at RBC Capital Markets in New York.
On the data front, US consumer price inflation is expected this week ahead of the Fed meeting. That is expected to post inflation of 2%, while Friday retail sales numbers should post a growth of 0.4%.
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