Sterling declines as latest UK election polls see May’s lead halved

In the UK, markets digested the bullish retail sales from last week resulting in an end of week surge in the Pound, pushing GBP/USD past a key psychological level on Thursday. As the markets in the US closed on Friday evening, cable was still trading above the key psychological level; a strong indication that we could see this continue to move higher. However, the uptick in cable could be a result of a weaker Dollar rather than a strong Pound. Over the weekend, four polls were released in the papers suggesting the support for Labour had strengthened, with the Conservative’s lead dropping down to around 9 – 13 points. As a result, the Pound remains fragile against many of the G10 currencies.

Politics continued to hinder the Greenback’s performance last week. FBI director, James Comey was fired during the investigation into Russia’s involvement in the election. Robert Mueller has been appointed by the American Justice Department to continue the investigation. It also emerged that Trump has released intelligence gathered by Israel about an Islamic State plot to the Russian foreign minister and also asked Comey to previously drop the investigation into his former national security adviser. As a result, the Dollar saw a decline against both the Euro and Pound.

 

Monday

  • Eurogroup Meeting

Tuesday

  • German Ifo Business Climate
  • Inflation Report Hearing 

Wednesday

  • FOMC Meeting Minutes
  • EUR Flash Manufacturing PMI
  • EUR Flash Service PMI

Thursday

  • GBP Second Estimate GDP
  • US Unemployment Claims

Friday

  • USD Core Durable Goods Order
  • Prelim GDP