UK Pound Struggles with Speculation on Political Outcomes

UK pound is struggling today, heading lower against the dollar and the euro as the general elections are looked forward to, and as expectations of a rate hike from the Bank of England are pushed out toward the fourth quarter of 2015.

Right now, there is a lot of speculation about what’s next for the UK pound. Policy is a bit unclear, and many are watching for a ramp up of political season. The outcome of May’s General Election is far from certain, and that has many wondering what could happen if things change in terms of policymakers. Some of that uncertainty is affecting the sterling, and will likely continue to affect it.
Current economic data is also weighing on the UK pound. There is a high account deficit right now, and that is slowing down efforts to raise interest rates. Additionally, with the economy recovering at a lower rate than expected, Lloyds Bank thinks that it will be much later in the year before the Bank of England raises rates. AS a result, it’s little surprise that sterling is struggling.
At 11:32 GMT GBP/USD is down to 1.4536 from the open at 1.5459. EUR/GBP is up to 0.7337 from the open at 0.7330. GBP/JPY is up to 184.5240 from the open at 183.7060.

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