Home Daily Commentaries Parliament to be dissolved ahead of general election

Parliament to be dissolved ahead of general election

Daily Currency Update

GBP - British PoundSterling has slipped a little over the past 24 hours as parliament is set to be dissolved ahead of the December 12th general election. Polling puts the Tory's in the lead with around 38%, with Labour in second on 26% and sterling's moves between now and then will likely be dictated by swings in opinion. GBP/USD has pushed back up to 1.29 this morning after trading around 1.2880 throughout the Asian session. With no new polls being released in the past 24 hours this slight uptick is more likely to do with risk-on trade as it appears we are edging closer to the first stage of a US/China trade deal.One of parliament's final acts was to elect deputy Speaker Sir Lindsay Hoyle to Speaker replacing the outgoing John Bercow. The Labour MP for Chorley has never publicly stated which side he voted for in the Brexit referendum and this along with his experience as deputy chair was likely why he got the job after four rounds of voting. Election campaigning kicks off in earnest tomorrow with Brexit the main focus of the British public. Many undecided voters who are sick to death of the ongoing deadlock may vote Conservative in an effort to push through PM Boris Johnson's deal and put the matter to bed. Hardcore remainers will likely vote Lib Dem who have promised to cancel Brexit if they win a majority. Bookies still have a Tory majority as the most likely outcome.GBP/EUR has traded sideways for much of the week and is currently at 1.1575.

Key Movers

Most European bourses are up this morning as some risk appetite returns to the market on US/China trade optimism. It appears we are getting closer to a first stage agreement between the two sides with China hoping to push back some tariffs and the Peoples Bank of China strengthening the Yuan to its strongest level since early August. The move by the PBOC will be welcome by US President Donald Trump who has long complained about foreign countries manipulating their currencies to the detriment of US industry. The Aussie dollar has rallied overnight as the Reserve Bank of Australia left its interest rate at 0.75% however gave a more hawkish than expected message about the state of the economy. RBA Governor, Philip Lowe described the economy as having reached a "gentle turning point" supporting the local buck as markets pare back the chances of further easing in monetary policy. AUD/USD has pushed above the .69 handle and GBP/AUD is heading back towards 1.86 as a result. New European Central Bank chief, Christine Lagarde spoke in Berlin last night, her first official speech as head of the bank. There was little movement in Euro crosses however as monetary policy wasn't discussed. EUR/USD is at 1.1130 with USD/JPY at 108.85. Today's main event will be the ISM Non-Manufacturing PMI from the States due at 3pm, an uptick from 52.6 to 53.5 is eyed.

Expected Ranges

  • GBP/USD: 1.2850 - 1.2970 ▼
  • GBP/EUR: 1.1550 - 1.1630 ▼
  • GBP/AUD: 1.8555 - 1.8720 ▼
  • GBP/NZD: 2.0005 - 2.0165 ▼
  • GBP/CAD: 1.6840 - 1.70 ▼