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Election optimism sends the Pound even higher

business-articlesElection optimism sends the Pound even higher
  • Will further election optimism buoy GBP?
  • US dollar supported by jobs data.  
  • Australian dollar could dip if RBA Governor focuses on weak data
Sterling climbing ahead of UK election 

The pound is still riding high against its rivals thanks to election optimism, with markets expecting Boris Johnson’s Conservative Party to gain a majority in Thursday’s election. 

Sterling achieved a two-and-a-half year high against the euro and a seven-month high against the US dollar last week. 

Looking ahead, the Pound could hold on to its gains if signs continue to indicate that the Conservatives will secure a majority. 
Will strong consumer inflation expectations buoy the US dollar? 

The US dollar was bolstered on Friday after US non-farm payrolls jumped to a 10-month high in November. 

Further data showed that wage growth remained steady and the unemployment rate fell back to 3.5%. 

Looking ahead to this afternoon, the ‘Greenback’ could edge up if November’s consumer inflation expectations improve after October’s slump. 
Dovish RBA to weigh on the Australian dollar  

The Australian dollar edged up against the euro and pound on Friday, but remained largely muted against the US dollar. 

Before the weekend, White House economic adviser Larry Kudlow said that the 15 December deadline is still important when it comes to the next round of US tariffs scheduled to kick in on Chinese goods. He also added that ‘the reality is constructive talks, almost daily talks, we are, in fact, close’.

Looking ahead, the ‘Aussie’ could come under pressure following a speech from the Reserve Bank of Australia’s (RBA) Governor Philip Lowe. If Lowe’s tone is dovish following last week’s disappointing Aussie growth data, AUD could stumble. 

Upcoming Data: 

9th December
16:00​USD Consumer Inflation Expectations (Nov) 
22:05​AUD RBA Governor Lowe Speech
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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