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22.10.201816:11 Forex Analysis & Reviews: What will the euro and pound do? One holds the budget of Italy, the second Brexit

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This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 22.10.2018 analysis

The movement of the euro and the British pound is becoming increasingly sensitive to geopolitical factors, such as Italian budget issues and Brexit negotiations, they have a more noticeable effect every day.

The euro began a week of growth against the backdrop of a statement by the Italian Prime Minister that the government is ready to sit at the negotiating table with EU representatives. At the same time, there was an increase in demand for Italian debt after a sharp sell-off in recent weeks. This year, the euro has often fallen when Italy's government bond yields rose.

The single currency rose 0.3 percent to $ 1.1550, departing from the recent lows of $ 1.1433. The euro also added 0.2 percent against the Swiss franc and against the pound. However, despite the vigorous start of the week, there is no certainty that the course will rise. The fate of the euro is still dominated by the Italian events.

Exchange Rates 22.10.2018 analysis

Equity markets are largely in positive territory amid expectations of tax cuts in China next year, this news launched a rally, first in Asian markets, and then in Europe. This helped ease geopolitical tensions between the West and Saudi Arabia over the murder of a prominent journalist and distract from the problems of Britain and the EU. Foreign exchange markets were mostly calm, although a more positive news background at the beginning of the week caused bullish sentiment.

For the dollar, the key factors are the violent sentiment of the Fed and signs of the strength of the US economy. I recommend to closely monitor the data on US GDP, which will be published this week, these figures will be a key factor in determining the direction of the dollar. So far, the American has grown against the Japanese yen, despite the fact that the yen looked favorably against the background of growing risks in the form of Brexit, Italy, and trade stresses in general.

Exchange Rates 22.10.2018 analysis

Irina Maksimova
Analytical expert of InstaForex
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