The Sterling pound today rallied to new 8-day highs against the US dollar after Nigel Farage surrendered a further 43 seats increasing the chances of a Tory majority government. The GBP/USD currency pair had traded with a bearish bias for most of today’s session and was at breakeven before the announcement after which it spiked higher.
The GBP/USD currency pair today rallied from a low of 1.2867 in the early London session to a high of 1.2918 in the American session following Farage’s decision and was off the tops at the time of writing.
The currency pair’s performance today was mostly subdued given the lack of any fundamental reports from the British docket. The pound’s performance was primarily driven by negative political sentiment as the European Union took legal action against the UK after Boris Johnson failed to nominate a new EU commissioner. The pair was also weighed down by opinion polls indicating that the December general election would result in a hung parliament with no party having a governing majority. Farage’s decision to withdraw more candidates boosted the pair as it increased the chances of a Conservative Party majority government.
The cable’s performance was also boosted by the weak US retail sales data for October released by the Census Bureau. The pair’s rally was also fueled by the positive headlines emanating from the US-China trade talks where a phase one deal seems likely.
The currency pair’s performance over the upcoming weekend is likely to be influenced by geopolitical events.
The GBP/USD currency pair was trading at 1.2897 as at 16:20 GMT having rallied from a low of 1.2867. The GBP/JPY currency pair was trading at 140.35, having risen from a low of 139.67.
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