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Fri 19 Jul 2024 12:30GMT

Sterling Sturdy despite Expected Month of Election Uncertainty

Published: 1 Nov at 3 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany,

Pound Sterling (GBP)
Despite concerns about an expected month of UK political uncertainty ahead of a December election, the Pound saw fairly solid demand over the past week. Investors are hoping that the ruling Conservative Party will perform well enough to pass its relatively soft Brexit plans.

Britain’s October construction PMI will be published on Monday, but Tuesday’s services data and Thursday’s Bank of England (BoE) policy decision are more likely to be influential.

Euro (EUR)
Yesterday’s Eurozone data continued a trend of showing slight signs of recovery but not enough to bolster market hopes. Germany’s data has also continued to indicate that Germany’s economy is in recession. Eurozone economic jitters weighed on the Euro.

Notable Eurozone data due in the coming week could give the Euro more solid support if it impresses. Eurozone manufacturing PMI data is due on Monday, with services PMIs and retail sales stats on Wednesday.

US Dollar (USD)
The US Dollar has seen mixed movement in recent sessions. Concerns that the Federal Reserve could continue to cut US interest rates and weaker US manufacturing PMI data from ISM limited the US Dollar’s strength, but a strong US Non-Farm Payroll report kept the currency supported.

Upcoming data will continue to influence the US Dollar and Federal Reserve speculation. If US factory orders and non-manufacturing PMI data impress investors on Monday and Tuesday, Fed rate cut speculation would soften and the US Dollar would strengthen.

Australian Dollar (AUD)
The Pound to Australian Dollar exchange rate ultimately failed to hold its ground today, as it benefitted from a combination of strong Chinese manufacturing data and Federal Reserve rate cut speculation. The trade-correlated Australian Dollar is often supported by strong Chinese data.

Australian Dollar investors are now highly anticipating Monday’s Australian retail sales stats, as well as Tuesday’s November Reserve Bank of Australia (RBA) policy decision. The bank is expected to avoid a dovish tone so the ‘Aussie’ could be in for more gains.

New Zealand Dollar (NZD)
Due to stronger than expected New Zealand confidence data and Chinese manufacturing data in the past week, the Pound to New Zealand Dollar exchange rate has failed to hold its ground. Similarly to the Australian Dollar, the New Zealand Dollar is gaining on a combination of solid data and Federal Reserve easing speculation.

As well as Fed speculation and US-China trade developments, the Pound to New Zealand Dollar exchange rate could be influenced by New Zealand’s key Q3 job market report on Wednesday.

Canadian Dollar (CAD)
The Canadian Dollar’s strong streak has come to an end, amid signs that Canada’s economy is slowing. Canada’s latest growth and manufacturing stats were fairly weak, leading to fresh Bank of Canada (BoC) interest rate cut bets and Canadian Dollar weakness.

If Bank of Canada rate cut bets continue to rise in response to upcoming weak Canadian trade and employment data, the Pound to Canadian Dollar exchange rate could climb even higher.
As of Friday, 1st November 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1588, GBP USD exchange rate was 1.2942, GBP AUD exchange rate was 1.8732, GBP NZD exchange rate was 2.0133, GBP CAD exchange rate was 1.7028, and GBP CNY exchange rate was 9.1075.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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