The FTSE 100 is failing to take advantage of the weakness seen in GBPUSD, with the dollar surging higher across the board. Nevertheless, with the Brexit tone softening from the EU, it is likely we will see more sterling strength to come. 

  • Markets ease back as we close out the week
  • Central bank easing fails to ignite stock markets
  • Brexit optimism on the rise amid improving tone from EU

The FTSE 100 is erasing its morning gains as we head into the close, with the recent bout of market uncertainty continuing to dominate. In a week where central banks have been the main focus, it seems markets are somewhat confused as to whether to celebrate the recent easing or instead worry that it may not last long enough. The Fed’s role in driving sentiment has not been limited to their rate decision, with daily Repo auctions raising fears that this liquidity crunch may be more than just a short-term bottleneck.

Dollar strength has dominated the FX space over the course of the day, with the greenback gaining ground across the board. Interestingly, this dollar rally has masked much of the Brexit optimism that has been growing over the course of the day. Talk of gradual progress has also been accompanied by plenty of commentary of a determination to get a deal done by the October deadline. While the UK and EU clearly remain some way from an ultimate resolution, there is a growing feeling that the EU would be willing to drop the controversial backstop. The question is whether there is enough time to provide border solutions that can convince each EU member (not least the Irish).

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

EUR/USD: Off multi-month highs, holds above 1.1200 ahead of ECB

Amid a broad-based US dollar rebound, EUR/USD corrects further from three-month highs of 1.1257 ahead of the European open, as the bulls take a breather ahead of the key European Central Bank (ECB) monetary policy decision.

EUR/USD News

GBP/USD retreats from five-week top to sub-1.2600 area amid quiet session

GBP/USD snaps five-day winning streak to take U-turn from 100-day SMA, still above 1.2500. BOE’s Bailey tells banks to prepare for no-deal exit and downs the GBP. The US Dollar bounces off three-month low amid risk reset, pre-ECB moves.

GBP/USD News

Riots could assist US recovery by ending the economic paralysis

The US economy may be headed for a V-shaped recovery aided ironically enough by the demonstrations that have made nonsense of the continued social and business restrictions and the riots whose damage will require massive spending to repair.

Read more

Gold: Bounces back above $1,700 to keep buyers hopeful

Gold prices recover from immediate support line, 50-day SMA. The yellow metal’s failure to close below 50-day SMA, not to forget a six-week-old ascending support line keeps the buyers hopeful. Risk reset, cautious mood ahead of the ECB also favors the buyers.

Gold News

WTI retraces within an immediate triangle around $37.00

WTI seesaws near three-month high inside a two-day-old symmetrical triangle. The black gold rose to the highest since March 11 the previous day but MACD’s weakness dragged it back from $38.30.

Oil News

Forex Majors

Cryptocurrencies

Signatures