Daily Currency Update

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Sterling steady as parliament set to be dissolved

GBP - British Pound

GBP/USD appears to have gained a foothold above 1.29 as parliament is set to be dissolved tomorrow night ahead of the December 12th election. Opinion polls will be the main driver of the pound ahead of the vote, with most bookmakers making a Tory majority the most likely outcome. Despite campaigning on a manifesto to lead the UK out of the EU with PM, Boris Johnson's renegotiated exit agreement the certainty this would provide is propping up the pound as the chances of a no-deal exit recede.

Should Labour push ahead then this would likely weaken sterling given they are looking to renegotiate the deal and then put it to another public vote. Should the Lib Dems somehow take the lead then this would see a big pound rally given they are looking to revoke Article 50 and keep is in the EU. Both these scenarios are pretty unlikely however recent election predictions have ended up being wide of the mark so you never know and any erosion of the Tory's current lead would see the pound slip.

Thursday sees the latest Bank of England interest rate decision with no change of policy expected. We could see some pound strength if Governor, Mark Carney confirms the chances of a no-deal Brexit are less likely however. GBP/USD is around 1.2940 with GBP/EUR a shade under 1.16.

Key Movers

Friday's main market area of focus was the monthly US Jobs report, with a bit of a mixed bag shown. The headline Non-Farm Payrolls saw 128k added to the labour force for October a touch better than the ADP figure on Wednesday and better than most were forecasting. The unemployment rate ticked up to 3.6% from 3.5% as expected however the monthly hourly earnings figure fell short rising only 0.2% when 0.3% was predicted.

There was no huge swings on the back of the prints losing some ground against the euro but gaining against the yen. The US economy is clearly slowing as shown by the first GDP reading for Q3 shown on Wednesday however not quite at the pace some were predicting. Friday also saw a worse than expected ISM Manufacturing PMI, mirroring other readings of the sector from around the world as the trade war between the US and China starts to bite.

This week sees US ISM Non-Manufacturing on Tuesday and EU economic forecasts on Thursday. Today's main event will be the first speech by new European Central Bank chief, Christine Lagarde due at at 7:30pm. Her views on the trade war, economic slowdown in the Eurozone will likely be scrutinsed by investors. EUR/USD is at 1.1170 with USD/JPY at 108.35

Expected Ranges

GBP/USD: 1.2895 - 1.2970 ▼

GBP/EUR: 1.1560 - 1.1630 ▼

GBP/AUD: 1.8665 - 1.88 ▼

GBP/NZD: 2.0 - 2.0180 ▼

GBP/CAD: 1.6940 - 1.7080 ▼