Pound struggles despite poll results

Philip McHugh November 29th 2019 - 2 minute read

  • Latest¬†YouGov¬†poll fails to keep pound on uptrend
  • Euro shakes off disappointing German inflation data
  • Widened current account deficit drags on Canadian dollar

 
 
Political uncertainty limits GBP gains 
 
In spite of the latest YouGov poll pointing towards the Conservatives gaining the largest number of seats in the general election the pound struggled to maintain a positive footing for long.
 
However, GBP exchange rates could find a fresh rallying point this morning if October’s net consumer credit data improves as forecast.
 
Investors expect to see an uptick in consumer borrowing at the start of the fourth quarter, suggesting a greater degree of confidence among households.
 
As long as consumers show evidence of shrugging off ongoing political jitters the pound could edge higher. 
 
 
Disappointing Eurozone inflation set to limit euro appeal
 
Although the German consumer price index largely fell short of forecasts yesterday this failed to drag the euro lower against its rivals.
 
With market risk appetite generally limited, thanks to the latest signs of a fallout between the US and China, support for the single currency picked up.
 
Even so, a similarly underwhelming Eurozone consumer price index could put a dampener on EUR exchange rates this morning.
 
If inflationary pressure shows any signs of softening this may increase the risk of future European Central Bank (ECB) easing. 
 
 
Canadian dollar softens ahead of gross domestic product report
 
As the third quarter current account deficit widened the mood towards the Canadian dollar soured, with confidence in the economic outlook weakening.
 
A general lack of market risk appetite also limited the strength of CAD exchange rates yesterday, as the odds of an imminent US-China trade deal faded once again.
 
Further weakness could be in store for the Canadian dollar if the latest set of gross domestic product figures fail to paint a more encouraging picture for investors.
 
Any indication that the Canadian economy lost momentum in the third quarter could see CAD exchange rates trending sharply lower across the board.
 
 
Upcoming Data:
 
Friday, 29th November 2019
09:30 GBP Net Consumer Credit
10:00 EUR Eurozone Consumer Price Index
13:30 CAD Gross Domestic Product
 
 

Written by
Philip McHugh

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