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GBP/USD pushes towards 1.30 on weaker dollar

GBP - British Pound

Sterling has pushed higher this morning helped by a weakening dollar and polling consistently showing the Tory's are looking likely to get a majority at next week's general election. Sterling has recouped yesterday's sell off and is trading higher however until the election it looks like 1.30 will act as a ceiling for GBP/USD unless there is a big shift in sentiment towards the Conservatives, which markets favour as it should bring an end to the deadlock over the UK/EU Withdrawal Agreement being signed off. Join our webinar at 1pm today to find out how you can plan your FX for potential election outcomes. Register Here.

The one piece of data from the UK yesterday was an upwardly revised Manufacturing PMI which rose from 48.3 to 48.9 compared to the Flash reading which has recently been reintroduced to the UK surveys.

Today starts two days of NATO meetings being hosted in the UK with US President, Donald Trump in attendance however it is likely to be general election news/polling that will have most impact on the pound. GBP/EUR is back above 1.17.

Key Movers

The main drivers in the forex markets came from the States yesterday as concerns over the state of the US manufacturing sector knocked the greenback.

The closely followed ISM Manufacturing PMI posted a worse than expected 48.1, its second worse reading since the global financial crisis and only just falling short of Octobers 47.8. Many had hoped the manufacturing drop had bottomed out in the States however this move lower in the survey has raised fears over the health of the US economy and the chances it may force the Fed to lower rates further when they appear to have paused their easing cycle.

The other big news was the announcement of further tariffs from Donald Trump, this time on Brazilian and Argentinian steel as well as a threat to tariff French cheese and Champagne possibly to the tune of 100%! The aggressive move is in reaction to France's recent digital services tax which the US claims is unfair to its tech companies.

Christine Lagarde's first major speech as head of the European Central Bank, didn't really move the shared currency as Lagarde preferred to talk about global climate concerns and the actions that central banks should take to tackle it.

Down Under the Aussie rose as the Reserve Bank of Australia held rates as expected at 0.75% and Q3 GDP hit target showing 0.5% growth. EUR/USD sits at 1.1080

Expected Ranges

GBP/USD: 1.2880 - 1.3010 ▲

GBP/EUR: 1.1645 - 1.1765 ▲

GBP/AUD: 1.8870 - 1.9040 ▲

GBP/NZD: 1.9835 - 2.0 ▲

GBP/CAD: 1.7170 - 1.73 ▲