Daily Currency Update

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Sterling steady as election campaigning kicks off

GBP - British Pound

GBP/USD continues to track around the 1.29 handle as MPs hit the campaign trail after parliament was dissolved last night. The Tory campaign was dealt a blow yesterday as comments by hardcore Brexiteer, Jacob Rees-Mogg about the Grenfell fire which saw 72 people die draw criticism from the survivors group Grenfell United as well as across the political spectrum.

Thankfully for the Tories some of JRM's comments were countered by an earlier interview from Labour's shadow Brexit Secretary Keir Starmer who appeared not to know the party's official line on its future Brexit strategy.

Data-wise yesterday saw a better than expected Services PMI reading from the UK coming in at 50, the level which shows no expansion or contraction. The reason for the stagnation was predictably, Brexit, with Duncan Brock, Group Director at the Chartered Institute and Supply commenting: "The sector’s main difficulties are largely of Brexit’s making and with another deadline comes more indecision and delay. Businesses are putting off their investments for happier times and consumers are saving their pennies in case rising costs have a more severe impact on their daily lives. Companies are waiting for a resolution by the UK Government to salvage the current situation so workflows can begin again at healthier levels."

There have been no new polls released in the past 24 hours to decisively move the pound however some euro weakness has helped push GBP/EUR back above the 1.16 handle.

Key Movers

The dollar has had a good 24 hours with the closely watched ISM Non-Manufacturing PMI beating estimates showing 54.7 for October. Last week's better than expected Q3 GDP reading from the States has also bolstered the greenback and with now less than a year until the 2020 US Presidential Election, Donald Trump will be hoping that the economic slide has bottomed out as a recession and job losses would deal a severe blow to his hopes of re-election.

Risk appetite seems to be returning to the markets as we seem to be inching closer to stage one of a US/China trade deal. An initial resolution to the impasse would help commodity currencies which have been hammered by the ongoing log-jam between the world's two super-powers. Improving sentiment has been evidenced by USD/JPY breaking above 109. The last time it was above 110 was back in May. The pain exerted by the extended trade war was evidenced in New Zealand overnight as its unemployment rate ticked up to 4.2% from 3.9%.

Its a relatively quiet day today however tomorrow is much busier with the quarterly Inflation Report from the Bank of England as well as the latest EU economic forecasts. EUR/USD trades at 1.1090 and AUD/USD has just broken .69.

Expected Ranges

GBP/USD: 1.2840 - 1.2950 ▲

GBP/EUR: 1.1560 - 1.1650 ▲

GBP/AUD: 1.86 - 1.8735 ▲

GBP/NZD: 2.01 - 2.0250 ▲

GBP/CAD: 1.6895 - 1.7040 ▲