Forex Today: Big Johnson win sparks Brexit optimism, eyes on US-China trade deal

Dhwani Mehta FXStreet

UK election: PM Johnson’s Conservatives crushed Labour Party by a landslide majority, with over 350 seats officially secured. GBP/USD consolidates the upsurge above 1.3450, having reached 19-month highs at 1.3515 after exit polls clearly suggested a Tory win. The majority has left Johnson with a clear Brexit mandate that has sparked renewed Brexit optimism.

The US dollar was heavily offered across the board, mainly driven by the extensive pound rally on Johnson’s victory. Meanwhile, Brexit optimism also benefited the euro, as EUR/USD hit the highest level since August at 1.1200.

US-China trade deal: Mixed headlines on the trade front kept the optimism in check, as Chinese sources and media reported that China leaders haven’t yet accepted the trade deal. Bloomberg quoted some sources, saying that US President Trump signed off a trade deal to avert Dec tariffs after reaching a deal in principle with China. It was also reported that the US will announce a China trade deal on Friday.

The commodity-currencies remain elevated on trade deal hopes, with the kiwi leading the pack while the anti-risk yen traded at two-week lows vs. the US dollar, as USD/JPY held above 109.50.

Among related markets, Asian stocks jumped in tandem with S&P 500 futures, while Treasury yields traded with moderate gains. Gold remained on the back foot below $ 1470 after gold in GBP terms slumped 2.5%.

Cryptocurrencies are consolidating losses heading into the weekend, with Bitcoin trading above $7,200.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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