MARKET DEVELOPMENT –AUD/USD Rises on Cross Buying, GBP/USD Downside Protection in Demand
DAILYFX UK GENERAL ELECTION PREVIEW
AUD / NZD: As had been expected, the New Zealand Government announced that they will plan to invest more than NZ$12bln on infrastructure projects amid downgrading their growth forecasts for 2019/20 to 2.3% from 3.2%. In response to the announcement, the NZD saw an initial lift, however, upside had been curbed by cross-related buying in AUD/NZD, which had briefly dipped below 1.04.
GBP: Yesterday’s YouGov MRP poll highlighted that the projected Conservative majority had narrowed from 359 to 339. However, the concern had lied with the fact accounting for a margin of error, the YouGov poll did not rule out the possibility of a hung parliament. Consequently, the Pound had dropped roughly 100pips in reaction, although this had been during relatively illiquid hours and thus the Pound has found firmer footing throughout the European session. Elsewhere, option investors are becoming increasingly wary of downside risks to the Pound with the premium for GBP puts continuing to rise against GBP calls as risk reversals fall to the lowest level since the EU referendum, surpassing that of the 2017 election.
Source: DailyFX, Refinitiv
Economic Calendar (11/12/19)
Source: DailyFX,
WHAT’S DRIVING MARKETS TODAY
- “UK General Election Preview: Everything You Need to Know” by Justin McQueen, Market Analyst
- “EUR/USD Forecast - Price Action Waits for Central Bank Double Header” by Nick Cawley, Market Analyst
- “Canadian Dollar Technical Analysis Overview: USD/CAD Consolidation Following Reversal” by Justin McQueen, Market Analyst
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
