The Pound (GBP) rose sharply against the major of its peers this morning as Theresa May called a suprise snap election. This helped the pound in a market where investors remain focused on international events such as the US Government’s increasingly aggressive stance towards North Korea, the controversial referendum in Turkey and the uncertainty of the French elections.
However with little in the way of domestic data until the release of the UK’s latest retail sales figures of Friday Sterling may find its advances slowed as the week goes on.
The Pound Euro (EUR) exchange rate pushed higher this morning as recent polls suggest that the French election may be tighter than initially thought.
Recent polls show that support for radical left-wing candidate Jean-Luc Mélenchon has surged over the last couple of weeks, putting him neck and neck with the scandal hit François Fillon and within spitting distance of centrist Emmanuel Macron and far-right Marine Le Pen, who have led the race in recent months.
With the election now a close call between the top four candidates, the single currency is likely to face increased volatility ahead of the first round of voting on Sunday.
Sterling trended around half a cent higher against the US Dollar (USD) this morning as geopolitical uncertainty punished the ‘Greenback’.
Markets have become increasingly nervous by the flaring of tensions between the US and North Korea, with US Vice-President Mike Pence warning North Korea ‘not to test trump’, following a recent trip to South Korea after the recent military parades in Pyongyang and a failed missile test over the weekend.
However the US Dollar may recoup some of its losses later this afternoon as analysts forecast that US industrial production will have shot up from 0.1% to 0.5% in March.
The Pound Canadian Dollar (CAD) exchange rate surged by nearly a cent on Tuesday morning as oil prices fell at their fast pace since March.
The drop follows a thin trading session over the Easter weekend and expectations that US crude production is likely to rise again over the coming months.
Sterling strengthened against the Australian Dollar overnight on Monday as the minutes from the Reserve Bank of Australia’s (RBA) April monetary policy meeting has lead markets to speculate on the possibility that the bank is moving closer to cutting interest rates as it remains concerned about the state of the labour market.
New Zealand Dollar
The Pound also advanced against the New Zealand Dollar this morning as the tensions in the Korea peninsular casts a shadow over the whole Asia-Pacific region, although the ‘Kiwi’ may push back later this afternoon if the Global Dairy Auction sees another uptick in prices.
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
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