The British pound today held on to yesterday’s gains against the US dollar two days ahead of Thursday’s elections with opinion polls predicting a win by the Conservative Party. The GBP/USD currency pair today rose to 8-month highs as investor optimism about Britain’s future including Brexit remained high.
The GBP/USD currency pair today traded in a range marked by a high of 1.3197 and a low of 1.3132 and was trading near the tops at the time of writing.
The currency pair traded sideways during the Asian session before dipping to its daily lows in the early European session. The pair then recovered and headed higher as the London session got underway. The release of the disappointing UK trade balance data for October by the Office for National Statistics derailed the pair’s rally briefly. Britain’s non-EU trade balance came in at -£5.73 billion versus the expected –£3.5 billion print. The weak industrial production data for October, which came in at 0.1% as compared to the consensus estimate of 0.2% also dragged the pair lower. The downbeat UK monthly GDP report for October, which remained flat versus expectations of a 0.1% expansion did not help the cable.
The cable’s performance was also boosted by the greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 97.43 amid global trade uncertainties. The looming US tariffs on Chinese imports scheduled for 15th December damped investors’ risk appetite, but the pound was mostly unaffected.
The currency pair’s future performance is likely to be affected by geopolitical events given tomorrow’s empty UK docket.
The GBP/USD currency pair was trading at 1.3190 as at 18:59 GMT having rallied from a low of 1.3132. The GBP/JPY currency pair was trading at 143.40, having risen from a low of 142.63.
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