Conservative polling lead keeps pound on stronger footing
Philip McHugh December 10th 2019 - 2 minute read
- Pound benefits as Conservatives maintain lead in the polls
- Widened German trade surplus underpins euro
- US dollar struggles in spite of weaker Chinese trade figures
Pound riding high before the UK heads to the polls
Investors continued to favour the pound yesterday as opinion polls pointed towards a solid Conservative lead with mere days to go before the snap general election.
However, this bullishness faded over the course of the day thanks to the latest survey from ICM which suggested only a 7 point gap between the Conservatives and Labour.
The mood towards the pound could improve once again this morning, however, if October’s UK gross domestic product report shows stronger growth.
Improved German economic sentiment could shore up euro
A surprise widening of the German trade surplus helped to limit the downside potential of EUR exchange rates at the start of the week.
Export volumes saw unexpected growth on the month in October, suggesting that the Eurozone’s powerhouse economy shrugged off the impact of ongoing global trade worries.
Support for the single currency could pick up further on the back of December’s ZEW economic sentiment surveys.
With forecasts suggesting a modest uptick in German economic confidence in the final month of the year, EUR exchange rates could edge higher this morning.
US dollar fluctuates on US/China trade concerns
Although weaker Chinese trade data limited market risk appetite on Monday this failed to shore up the US dollar against its rivals.
With markets still wary of the impact that the White House’s approach to trade is having on the economy support for USD exchange rates proved muted.
Even so, an improvement in the latest NFIB small business optimism index could help the US dollar return to a positive footing this afternoon.
Evidence that businesses see greater cause for confidence as the end of 2019 approaches may lift USD exchange rates, even as anticipation for the latest Federal Reserve policy decision mounts.
Upcoming Data:
Tuesday, 10th December 2019
09:30 GBP Gross Domestic Product
10:00 EUR German Economic Sentiment Index
13:30 USD NFIB Small Business Optimism Index
Written by
Philip McHugh