The pound has had a fairly volatile night against most major currencies, including the GBPUSD rate, these sort of global events do not only impact the currency attributed to the election (USD) but an election of this magnitude can impact all major currencies as it can alter investors market sentiment and attitude towards risk.
On top of this for Sterling exchange rates it is thought, not set in stone that with Trump being close with U.K Prime Minister Boris Johnson that the U.K may find an easier path to a post Brexit trade deal with the U.S should Trump be President and that the road may be a little longer and windy to get such an agreement in place with Joe Biden. With that in mind it is likely that a Trump victory may be seen as a slight positive for the pound against other currencies and a Biden victory could lead to Sterling weakness.
For GBPUSD however you may see the opposite, as a Trump victory appears to (if you have followed rate movements overnight as results have come through) give strength to the Dollar, it is no secret that due to the pandemic the U.S will have a severe economic hangover and a long and protracted recovery ahead, investors seem to believe that Trump may be better placed to negotiate through those troubled waters.
Should Biden get in then you may see GBPUSD back up through 1.30 again, but as always with such events and especially when attributed to the USD, a well known safer haven currency it is always hard to know 100% how the markets will react until they have reacted.
US Election results Biden Their Time on Whether or not Trump Has Pulled off an Unexpected Victory
At this stage we are still not any clearer on who will win, but at the time of writing this post Biden was sat on 220 to Trump’s 213, but still with some key areas votes to come back. The magic number for victory is 270 and this result still may not be known for quite a while yet.
Hillary Clinton had already conceded by this time at the last U.S election so this goes to show just how much closer the race for the white house is on this occasion, it might even mean that we do not get a clear vision of the results until the end of the week, vastly down to the postal voting system over there and the sheer millions of votes left to be counted that could make the vital difference.
Barnier Due to Address the EU on Brexit Today
With all of the news over in the U.S it is very easy to forget that Brexit talks are still going on daily, according to reports yesterday there are still fairly wide gaps to narrow down before we see any key progress, however as I have mentioned previously on this site it really is difficult to know where there is political posturing and where the truth is currently at.
We can currently only rely on media reports and jawboning from politicians for the latest on the longest version of deal or no deal, still yet to be decided. Michel Barnier, Chief EU Brexit negotiator is due to discuss progress later with his EU counterparts so any hint of progress may give the pound a boost, more doom and gloom or a negative tone could send the pound down again.
All in all we have an extremely busy day and rest of the week ahead for Sterling exchange rates, if you are close to carrying out a large currency transaction then it will be prudent to keep a very keen eye on the markets as they move every second of every trading day.
Should you wish to discuss a particular transaction and the various market tools we have that could help protect you from an adverse movement or to take advantage of a big shift in your favour, without you needing to be available then we have precisely the contracts to cater for that.
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