British Pound Rises Despite Brexit Uncertainty

Market Reviews

Euro rose moderately against the US dollar, trading as the second strongest currency for today, despite weak German and Eurozone services PMIs. Eurozone PMI services fell to 53.4 in November, down from 53.7 in October. PMI composite was finalized at 52.7, down from October’s 53.1. That’s the lowest level since September 2016. German services PMI fell to 53.3 in November from 54.7 in October.

The single currency was also supported by positive development in Italy. Italian Prime Minister Giuseppe Conte said today that he is ready to slightly change some of the measures included in the country's budget for 2019 in an attempt to overcome the refusal of the European Commission.

The British pound significantly increased against the US dollar, which was caused by partial profit taking after yesterday's collapse, as well as the general weakening of the US currency due to doubts about the prospects for resolving the US-China trade conflict.

The pound strengthened despite weak UK PMI data. UK PMI services dropped notably to 50.4 in November, down from 52.2 in October and missed forecast of 52.5. That’s also the lowest reading in 28 months.

On stock markets, FTSE lost 1.02%, DAX declined 0.68%, CAC fell 0.76%. Earlier today, Nikkei closed down -0.53%, Singapore Strait Times dropped 0.37%, Hong Kong HSI and China Shanghai SSE lost 1.62% and 0.61% respectively.

The results of the Bank of Canada meeting will be announced today. As expected, the central bank will leave the base interest rate unchanged at 1.75% after an increase of 25 basis points for the last time in October.