The pound hit a two-and-a-half year high against the euro on Thursday as confidence continued to grow that Boris Johnson’s Conservative Party will gain the majority required to deliver Brexit. The pound gained 0.2% against the euro and 0.4% against the dollar. Some analysts believe the pound will rise even further if the Conservatives do reproduce the predictions at the 12th December vote.
A poll of 60 FX strategists found that the pound would rise about 3% to $1.35 in the next 12 months on the back of the UK leaving the EU under the withdrawal agreement. If the polls remain flat between now and the election, the pound will continue to make steady gains.
GBPUSD opened at 1.3145 and made steady gains across the day, climbing slowly to close at a high of 1.3163
GBPEUR opened at a high of 1.1857 and although it fell to a low of 1.1831 before recovering to close almost unchanged 1.1856
The dollar fell for the fifth consecutive day on Thursday as the weak economic data combined with pound and euro strength weighed on the dollar. Most other currencies traded in tight ranges as there was mixed news about US-China trade negotiations. The dollar index was 0.2% lower and the euro gained the same against the greenback.
Reports such as weekly jobless claims and trade deficit were better than expected but they did not move the dollar nearly as much as poor private payrolls and services activity data from the day before. The dollar also fell against its safe-haven rival the Japanese yen by 0.1%.
The Federal Reserve has said that its rate-cutting policy is on hold, but investors are questioning whether this will remain the case with the US economy slowing down.
EURUSD opened at 1.1082 and climbed steadily across the day to close at a high of 1.1103