Morning All and Happy Friday!!
As the week draws to a close and the sun continues to shine we look to the currency market today for some volatility, and overnight we haven’t been disappointed. The Pound has fallen from highs seen earlier this week around 1.3050 against the Dollar and 1.1625 against the Euro. We open this morning with Sterling having reaching a low of 1.2865 against the Dollar and 1.1465 against the Euro.
So what has caused this sharp decline…? We can look to some polling data last night showing the Tories lead being cut slightly against Labour. As the build-up to the UK election hot’s up we will no doubt continue to see movement in the currency market, with a strong chance of seeing the Pound weaken should the overwhelming majority that we expect for the Tories start to diminish.
The feel good factor around the Euro continues with safe haven status continuing to be seen. EUR/USD has reached an 11 month high in the last week and GBP/EUR has reached a 2 month low.
We have no data out in this morning’s European session with all the markets focus today firmly fixed on U.S GDP and Durable Goods data at 1.30pm. The market will look to this closely with potential for a U.S rate hike still on the cards for June. Despite political unrest in the U.S and some Dollar weakness seen over the last couple of weeks a hike in June would surely bring a stronger Dollar. However with the political winds shifting in the U.S should there now not be a hike then we could see some massive losing runs for the Dollar.
Have a good weekend