Tory Lead Narrows Ahead of Tomorrow’s Election
With less than 24 hours to go until the public cast their vote in the first December election since 1923, the pound to US dollar rate is regathering its balance after last night’s YouGov MRP poll. Having predicted the outcome of the last election, the most anticipated political survey of the lot suggests the race has tightened significantly in the last fortnight.
The poll of 105,612 people – a much larger sample than other polls – taken over the last seven days, puts the Conservatives on course to win 339 seats, an extra 21 compared to the 2017 election. While that would represent a majority of 28 for Mr Johnson, the poll’s range of potential results spans 367 Tory seats to just 311, leaving a hung parliament very much on the table. The GBP vs USD subsequently fell in value back towards the 1.31 level.
Steep declines in the manufacturing and construction industries caused Britain’s economy to stall in the three months to October. While year-on-year GDP growth slowed to 0.7% in October – the lowest rate of growth since March 2012 – further highlighting the weakness of the UK economy. There poor economic readings added weight to the pounds concerns over another hung parliament.
Disappointing Data Hampers Dollar
Dollar investors are becoming increasingly concerned that the 15 December deadline for Washington to form new tariffs on Chinese goods is unlikely to be met. This could severely hamper US-China trade developments and significantly delay a trade deal between the two superpowers well into next year.
The dollar wasn’t given any reason for cheer ahead of tomorrows Fed interest rate announcement after the US economy was dealt a double blow: Nonfarm worker productivity fell at its most rapid rate in nearly four years in the third quarter, and growth in labour costs wasn’t as robust as forecast. The central bank is not expected to cut interest rates today, having reduced borrowing costs in October for the third time this year. However, officials will also release their quarterly forecasts for longer-term growth and interest rates, which will consider disappointing data like this.
In case you hadn’t heard, there’s a general election in the UK tomorrow. Has the YouGov MRP poll hit the back of the net again and correctly predicted a second general election in a row? The pound vs US dollar rate certainly hopes so.
It’s a busy day over in the US today, kicking off with the release of the Consumer Price Index excluding Food & Energy, followed by the FOMC Economic Projections, Fed Interest Rate Decision and Fed Monetary Policy Statement. All of which is rounded off by an FOMC Press Conference.
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