GBP and EUR Well Placed to Advance After US Mid-Term Elections

GBP and EUR prices, news and analysis:

• If USD weakness persists after the US mid-term elections, GBP and EUR could be among the main beneficiaries.
• Hopes of a Brexit deal between the UK and the EU are helping lift both currencies.

Brexit hopes bolster GBP and EUR

GBP and EUR are both climbing in Europe after the results of the US mid-term elections, which have led to USD weakness. Now, both may extend their gains on rising hopes of a Brexit deal between the UK and the EU.

The chances of reaching a withdrawal agreement have risen after UK Prime Minister Theresa May reportedly came close to winning the backing of her Cabinet for her plans to resolve the issue of the border between Northern Ireland, which is part of the UK, and the Irish Republic. UK officials are now said to be working on the details of the proposal, which could involve a temporary customs agreement with the EU that does not mean a border between Ireland and the UK mainland.

GBP, which has been most sensitive to Brexit developments, is now well placed to advance further despite comments by Irish Prime Minister Leo Varadkar suggesting that the chances of a withdrawal agreement this month are fading, while next month remains a possibility.

GBPUSD Price Chart, Hourly Timeframe (November 1-7, 2018)

Chart by IG

The Euro could advance further too after news that German industrial output rose unexpectedly in September, climbing by 0.2% month/month rather than falling by 0.1% as predicted. That has helped allay fears of a Eurozone economic slowdown and has already led to a firmer currency.

EURUSD Price Chart, Hourly Timeframe (November 1-7, 2018)

Chart by IG

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex