GBP holding gains, Election Day approaches

Philip McHugh December 9th 2019 - 2 minute read

After dipping slightly at the end of last week, GBP exchange rates have pushed higher again this morning, with investors’ sights firmly set on the upcoming election.

GBP/EUR is currently trading at €1.1891, GBP/USD has crept up to $1.3157, and GBP/CAD has pushed up to C$1.7447. GBP/AUD and GBP/NZD have advanced to AU$1.9285 and NZ$2.0085 respectively.

What’s been happening?

The pound fluctuated at the tail end of last week on concerns that the Conservatives could lose their lead in the polls following a second televised debate between Prime Minister Boris Johnson and Labour leader Jeremy Corbyn.

However, the currency remained within touching distance of its recent highs against the euro and US dollar.
The US dollar, meanwhile, jumped before the weekend as US non-farm payrolls and average earnings data impressed.

The report alleviated concerns about the US economic outlook and increased the odds of the Federal Reserve leaving interest rates unchanged for the foreseeable future. 

What’s coming up?

Today’s data calendar is fairly sparse, with no notable releases for the UK.

GBP investors will remain squarely focused on the UK election, with the currency holding gains as long as signs continue pointing towards a Conservative majority.

According to Lloyds Bank: ‘With only a few days to go before the UK general election, opinion polls point to the likelihood of a Conservative majority. However, there are still doubts over the reliability of most of the polls. The MRP poll from YouGov seemed to more accurately predict the result of the 2017 election than any of its competitors, which is why the results of such a survey a few weeks ago caused a stir when it predicted a Conservative majority.

However, that was relatively early in the campaign, so tomorrow night’s update from YouGov will be watched closely to see whether it shows any change in voting intentions as the day approaches.’

The euro could fluctuate today following the publication of the Eurozone’s Sentix Investor Confidence index.
EUR exchange rates could be pressured lower if sentiment declines as expected.
 

Written by
Philip McHugh

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