The pound was turbo charged overnight on Thursday, with the currency flying high after the exit poll suggested the Conservatives were on track for a major win.
Sterling appears to be on the front foot this morning, with GBP/EUR climbing to €1.1055, GBP/USD surging to $1.2145 and GBP/CAD jumping to C$1.6179. GBP/AUD and GBP/NZD have both strengthened, rising to AU$1.7906 and NZ$1.9141 respectively.
UK politics will remain in focus today as MPs vote on a bill to delay Brexit.
What’s been happening?
The pound initially tumbled on Tuesday as markets were spooked by speculation the UK could soon face a snap election.
However, Sterling mounted a recovery in the afternoon as political developments began to ease no-deal Brexit fears.
This included the dramatic defection of Tory MP Phillip Lee to the Lib Dems, resulting in Boris Johnson losing his working majority in the Commons.
This was followed by a vote which ceded control of the Commons to opposition MPs, allowing them to table a bill requesting a Brexit delay.
The euro struggled to find support on Tuesday, with investors remaining wary of the single currency amidst speculation that the ECB will unleash aggressive monetary easing this month.
Meanwhile, the US dollar’s bullish run came to an abrupt halt yesterday after the ISM manufacturing PMI revealed a shock contraction in US factory growth last month.
What’s coming up?
UK political headlines will continue dictating the direction of the pound today, with MP’s set to vote on a Brexit bill later this evening and Johnson expected to call for general election.
The UK’s services PMI may also potentially influence GBP exchange rates today, with another weak performance by the service sector in August possibly undermining any further recovery in Sterling.
For EUR investors the focus will be on the Eurozone’s latest retail sales figures, which could drag on the euro if sales contracted in July as economists suspect.
Finally, a number of speeches by Federal Reserve policy makers are on the docket today, with USD investors likely to be on the lookout for any hints on whether the Fed may continue cutting interest rates this month.
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)