Daily Currency Update

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Sterling slips ahead of election

GBP - British Pound

Sterling has slipped this week after Friday saw another terror incident on London Bridge leave two dead and numerous injured. In horrific scenes at a prisoner rehabilitation event, convicted terrorist Usman Khan stabbed two Cambridge graduates Jack Merritt and Saskia Jones before being tackled by attendees of the conference and members of the public and being shot by police. The awful incident has put law and order back to the forefront of the British public's mind after years of Conservative austerity.

As a result GBP has dipped this morning with Labour gaining a touch in the polls raising the chances of a hung parliament, however bookmakers still have a Tory majority the most likely outcome. GBP/USD is currently around the 1.2920 handle with GBP/EUR down to 1.1730.

This week polling and reaction to the terror attack will likely direct the pound however we also have the UK hosting a NATO summit on Tuesday/Wednesday so any comments by Donald Trump on the UK election may influence sterling, possibly to its detriment if he says anything to endorse Boris Johnson or berate his opponents. Join our webinar tomorrow at 1pm to find out how you can plan your FX for potential election outcomes. Register Here.

Key Movers

Global risk appetite is up this morning as China posted better than expected data over the weekend. The closely watched Chinese Manufacturing PMI posted its best reading in eight months coming in at 50.2, better than the 49.5 predicted. The accompanying Non-Manufacturing PMI also beat estimates at 54.4. The positive readings has seen USD/JPY push back towards 110, currently around 109.70 and the Aussie and Kiwi both gain.

Looking ahead, comments from leaders at the Nato summit and US/Chinese officials re: trade will likely cause the most waves in fx markets however there is also some key data/speeches to keep an eye on. This afternoon we have new European Central Bank head Christine Lagarde due to talk about monetary policy in Brussels ahead of US ISM Manufacturing PMI numbers. Tonight we have Australian GDP and the Reserve Bank of Australia's interest rate decision with no change in policy expected. We end the week with the monthly jobs report from the States with the headline Non-Farm Payrolls expected to show 189k added for November. EUR/USD continues to trade around 1.10.

Expected Ranges

GBP/USD: 1.2870 - 1.2970 ▼

GBP/EUR: 1.1670 - 1.1780 ▼

GBP/AUD: 1.8930 - 1.91 ▼

GBP/NZD: 1.99 - 2.01 ▼

GBP/CAD: 1.7070 - 1.7210 ▼