Key Poll Suggests Tory Majority
It appears the pound vs us dollar rate is embroiled in a game of opinion poll tennis. On Monday the pair edged higher on the back of polls that gave the Conservatives a comfortable lead, before slipping lower under the weight of a poll that suggested Labour had narrowed their advantage. Last night’s key YouGov MRP prediction – that accurately predicted the outcome of the vote back in 2017 – put the ball back in Labour’s court, by indicating the Conservatives can secure a majority in Parliament that might enable them to break the Brexit deadlock. The MRP collates all YouGov data from the past seven days and generates a seat-by-seat outcome, rather than relying on a national sample – this granular approach is arguably more accurate. The pound versus dollar rebounded higher as a result.
Dollar Responds to Fresh Claims That a US-China Trade Deal Is Near
The US dollar took confidence from fresh claims that a US-China trade deal is just around the corner. According to a White House statement yesterday, the negotiators are in the “final throes” of firming up the ‘phase one deal’. This was backed up by China’s Ministry of Commerce, which noted that Vice Premier Liu He had spoken with senior US officials on Tuesday. China said they “discussed how to resolve each other’s core concerns and reached consensus on how to resolve related issues.”
The pick of an economic data deluge from the US yesterday were GDP figures, which revealed that domestic economic expansion remained on track broadly speaking, as it entered the fourth quarter. While US Durable Goods Orders climb unexpectedly by 0.6% in October. All positive news for the economy that the US Federal Reserve will consider when contemplating its monetary policy.
It doesn’t take an expert to know that the upcoming election will impact the value of the pound – it’s already doing so and the vote’s still two weeks away. However, one of the City of London’s leading foreign exchange analysts – David Bloom at HSBC – believes that the election hasn’t been priced into the value of the pound yet. Therefore, the election result, “could have dramatic impacts” on the currency.
The Thanksgiving Bank Holiday means it’s all quiet on the data release front in the US after a busy couple of days. Tomorrow sees the release of UK Consumer Confidence data and the Chicago Purchasing Managers’ Index.
Tomorrow evening’s live leadership debate from Cardiff will feature a seven-way podium debate between leaders or senior figures from the seven major parties. Investors in the pound will be tuning in to the BBC to see who asserts themselves the most.
If you would like to learn more about factors influencing GBP/USD exchange rates for an upcoming currency transfer, feel free to contact myself, Jonathan Watson, using the form below.