Analysts were confused yesterday as the pound rallied late on to climb 0.4% against the euro to reach a six-month high. General election polling still indicates that a Conservative majority is the most likely outcome though this is not seen as guaranteed. The pound rally seems premature if solely based on this prediction. Though if a Conservative majority came to pass, even a small one, then it seems likely there would be a soft Brexit of some form and then Brexit would no longer make the currency headlines.
The pound was unmoved by data showing that retail sales in the UK were weaker than expected, having risen 3.1% instead of the predicted 3.7%.
GBPUSD opened at 1.2842 and was stable for most of the day until shortly before closing, at which point it rose to a high of 1.2881
GBPEUR opened at 1.1663 rose more steadily across the day, closing at a high of 1.1691
The dollar fell against the Japanese yen on Thursday as investors favoured safer assets as reports that the US and China were having trouble completing “phase one” of their trade arrangements. The yen gained 0.39% against the dollar along with the Swiss franc which gained 0.16%. The dollar index fell 0.22% with US Treasury bond prices rising. Data released yesterday showed that producer prices increased by the most in six months in October, boosting the case for not lowering interest rates any further.
In political news, Speaker of The House Nancy Pelosi stated President Donald Trump had admitted to bribery over the Ukraine scandal, an impeachable offence under the US constitution.
EURUSD opened 1.1011 and fell to a midday low of 1.0991 and then quickly recovered across the afternoon to close at a high of 1.1017