The Pound (GBP) fluctuated wildly yesterday as recent polling data caused market jitters.
Sterling initially fell in the morning as a YouGov poll suggested that the Conservatives faced the possibility of losing their majority in the upcoming election; something markets fear could hamper Brexit negotiations.
However conflicting polls released later, suggesting that the Tories are still set to increase their number of seats, caused the Pound to rally against the majority of its peers by the afternoon.
Sterling may begin to slide again this morning with the release of the latest Manufacturing PMI, with analysts forecasting that activity will have declined in May.
The Pound’s recent climb against the Euro (EUR) was cut short yesterday morning as polls indicated that the election could lead to a hung parliament.
While Sterling was able to claw back some of its losses by the afternoon it proved to be short lived, with the pairing continuing its decline overnight.
The single currency was also bolstered this morning by a stronger than expected German manufacturing PMI. Activity rose from 58.2 to 59.5 last month, slightly outpacing predictions it would rise to 59.4.
Political jitters dominated the Pound US Dollar (GBP USD) exchange rate on Wednesday with the pairing fluctuating wildly as polls differed on their outlook for the upcoming election.
However after surging to a new weekly high as polls suggested a greater Conservative majority, Sterling slipped again in the evening as a hawkish speech by Federal Reserve Bank of Dallas President Robert Kaplan increased the market odds of a rate hike later this month.
The ‘Greenback’ may be forced to cede some ground later today, however, as economists predict that US factory activity will have slipped slightly in May.
Sterling rocketed up over two cents against the Canadian Dollar (CAD) in trade yesterday as oil prices continued to slide.
The ‘Loonie’ tumbled as prices for Canada’s main export slipped below US$50 a barrel for the first time in two weeks, with the latest decline being prompted by reports that Libya had increased its production to over 800,000 barrels a day.
Further weakness in commodity prices saw the Pound strengthen against the Australian Dollar (AUD) yesterday evening, with a larger than expected fall in Australia’s Manufacturing Index prompting the pairing to reach a new weekly high.
New Zealand Dollar
The Pound also advanced against the New Zealand Dollar (NZD) overnight on Wednesday as the commodity-correlated currency was softened by a decline in sentiment following the fall in oil 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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