Sterling has been in and around the 1.16 mark since the announcement of a general election. There could be expectation for rates to stay like this for the next couple of weeks, unless something significant happens for any of the parties such as a likely hung parliament.
With regards to the General election, Labour last week was hit with a couple of setbacks as Labour MP’s announced they will not be re-standing and urging Labour voters not to vote for Jeremey Corbyn. Both Ian Austin and Kay Burley said the current Labour Leader is ‘Unfit’ to lead the party. This could benefit the Conservatives Party as they could extend their lead over Labour, but this could also result in the Liberal Democrats picking up a few more seats.
Sterling would ‘Go Through the roof” against the US dollar and the euro on a conservative Majority the UBP’s Kinsella has said. This could be a good talking point for people buying GBP as the current way in which the polls are heading could see a Conservative majority.
The euro has had a pretty slow start to November, only two EUR-crosses have gained some ground EUR/GBP 0.12% and EUR/JPY 0.23%. The euro held steady on Friday last week even though it almost hit a 3-week low as the USD benefited from the news that China and the US had agreed to roll back tariffs as part of a ‘Preliminary’ pact to end their trade war. EUR/GBP rates remain relatively unchanged subsequent to the speech delivered by the new appointed president of the ECB Christine Lagarde. Even though she called for ‘strength, resolve and courage’ in her speech it was interpreted by analysts a bit differently. It could be reasoned as she may not have any plans to put into immediate effect.
With regards to the USD, much talk is about the US-China trade deal and the dialogue between the two. We saw the USD lose ground against the AUD as talks between the US and China soured. The USD saw gains last week against the JPY and Swiss Franc after the Chinese commerce ministry spokesman made comments about a possible trade deal, which is prompting investors to dump the perceived ‘Safe-havens’ such as the Japanese Currency. The USD made slight gains on the GBP after the BOE announced the monetary policy decision which saw the rates near 1.2825.
We saw the USD gain over 1 cent on the EUR Last week. Again, this is all down to the trade talks taking place.
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