Election optimism sends the Pound even higher

Philip McHugh December 9th 2019 - < 1 minute read

  • 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 ‚ÄėGreenback‚Äô could edge up if November‚Äôs consumer inflation expectations improve after October‚Äôs 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¬†‚Äėthe reality is constructive talks, almost daily talks, we are, in fact, close‚Äô.

Looking ahead, the ‚ÄėAussie‚Äô could come under pressure following a speech from the Reserve Bank of Australia‚Äôs (RBA) Governor Philip Lowe. If Lowe‚Äôs tone is dovish following last week‚Äôs 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

Written by
Philip McHugh

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