No clear winner in first election debate leaves GBP weaker

The pound fell back on Tuesday, undermined by ongoing political uncertainty in the UK.

Sterling is struggling to find momentum so far this morning, with GBP/EUR rangebound at €1.1663, GBP/USD subdued at $1.2905 and GBP/CAD flat at C$1.7158. GBP/AUD and GBP/NZD are holding steady at AU$1.8946 and NZ$2.0111 respectively.

Centre stage today we have the minutes from the Federal Open Market Committee’s most recent meeting. Could a dovish outlook from Fed policymakers drag on the US dollar?

What’s been happening?

The pound was forced to walk back most of Monday’s gains during yesterday’s session as markets reacted to the first leaders debate between Boris Johnson and Jeremy Corbyn.

Neither leader really came out on top in the first debate, clipping demand for Sterling amid concerns Johnson had the most to lose from the so-so performance.

In terms of data the pound was also pressured as the Confederation of British Industry (CBI) reported that industrial orders in the UK picked up this month, but still remain broadly weak.

The euro found some modest support on Tuesday as European Central Bank (ECB) officials repeated their calls for EU governments to support the bank’s stimulus efforts through fiscal policy.

Finally, the US dollar was left rangebound yesterday as US-China trade pessimism saw US Treasury bonds continue to weaken.

What’s coming up?

In the spotlight today we have the publication of the minutes from the Federal Reserve’s October policy meeting.

USD investors will be hoping the minutes will shed more light on the Fed’s intensions for monetary policy in 2020.

Expect to see the US dollar remain on the back foot if the minutes indicate that the bank could explore the possibility of additional rate cuts next year.

Also on the docket today is the publication of the ECB’s financial stability review, with the euro potentially being knocked if the bank remains wary of the risks facing the Eurozone.

In the absence of any notable data, the focus for GBP investors will remain firmly on UK politics.