Conservative Maintain Healthy Lead in the Polls
Election week is finally upon us. As the contenders enter the home straight, can the pound to US dollar rate maintain the pace it gathered on Friday when it raced to a fresh seven-month high? This largely depends on the likelihood of the Conservatives achieving a majority in parliament – a potential outcome that has been propping up the pound recently, because it could pave the way to the Brexit deadlock being broken.
Four opinion polls published on Saturday give Boris Johnson’s Conservative Party a lead of between eight and 15 points over Labour. The Conservatives are currently in pole position, but Labour has narrowed their lead in recent weeks. Time will tell if it’s enough to cause an upset on Thursday.
US Economy Boosted by Positive Data
Such is the influence of the general election on the GBP vs USD rate that it appeared to pay little attention to Friday’s Nonfarm payroll figures from the US. The jobs market delivered a first-class performance in November, with payrolls soaring by 266,000 – its biggest increase in 10 months – and the unemployment rate falling to 3.5%, according to Labor Department numbers. While average hourly earnings rose by 3.1% from a year ago, just above the 3% forecast by economists.
American consumer confidence improved considerably in December, according to an estimate by the University of Michigan released on Friday. The gauge of consumer sentiment rose to a preliminary December reading of 99.2, from a final November reading of 96. The dollar took comfort in this raft of positive data, following a challenging year for the US economy.
All roads lead to the UK general election on Thursday for the pound. With just three days to go until the third vote in less than five years, we are in the middle of a polling frenzy. Despite our trust in political surveys deteriorating in recent years, after a string of inaccurate predictions, we can’t help keeping an eye on them. Investors in the pound certainly will be over the next couple of days.
We must wait until tomorrow for any economic data of note from either side of the Atlantic when the following figures are released: UK Manufacturing Production, UK Industrial Production, UK GDP, US Nonfarm Productivity and US Unit Labour Costs.
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