Pound hits multi-month highs ahead of UK election
[vc_row][vc_column][vc_column_text]Bets that the snap general election will not result in another hung parliament encouraged the pound to push to fresh multi-month highs against many of the majors.
Support for the euro weakened in response to the latest German factory orders and industrial production figures, which both showed a fresh decline at the start of the fourth quarter.
The US dollar advanced ahead of the weekend thanks to a surprise improvement in November’s unemployment rate, fuelled by a stronger non-farm payrolls report.
Disappointing Australian trade data weighed on Australian dollar exchange rates, meanwhile, as worries over the economic outlook picked up in the face of ongoing global trade jitters.
As opinion polls continued to point towards a Conservative lead ahead of the upcoming election the pound stormed higher.
With investors pricing in improved odds of a Conservative majority the pound climbed to fresh multi-month highs against both the euro and the US dollar.
While the potential for a political upset remains this was not enough to limit the strength of GBP exchange rates over the course of the last week.
A surprise upward revision to November’s UK services PMI offered the pound an additional boost, even though the sector still saw a contraction on the month.
The ultimate outcome of Thursday’s election may not send GBP exchange rates much higher given that the impact of a Conservative majority has been priced in to a certain extent over the last week.
Even if the vote does not deliver a hung parliament, though, the lingering uncertainty over Brexit and the UK’s future relationship with the EU could still put a dampener on the pound.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]
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* Information courtesy of Currencies Direct, Philip McHugh
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. This article was written by Currencies Direct.
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