The pound was stable on Wednesday as weaker economic data was balanced with favourable political developments. Average weekly earnings rose at a weaker rate in Q3 and inflation was at its lowers level in nearly three years in October. Investors have increased bets that the Bank of England might cut interest rates.
However, the pound was supported by polls showing that the Conservative Party held a 14-point lead over the opposition Labour Party.
The Brexit Party’s pledge to not stand candidates in Conservative held seats continues to benefit Sterling, though it was largely unchanged against the euro. The pound will continue to be supported by news of Conservative success.
GBPUSD opened at 1.2854 and fell slightly during the day, closing at 1.2837
GBPEUR opened at 1.1671 and was almost flat on the day closing only very slightly lower at 1.1666
The dollar fell against the Japanese yen and the Swiss franc after reports that US-China trade talks had “hit a snag” regarding farm purchases. The yen gained 0.21% and the franc made 0.28%. The markets generally reacted with a risk-averse stance after having been ready for the reduced risk of recession and reduced trade risk.
The Swiss franc also made gains against the euro, and the dollar index that measures the greenback against six major rivals was steady due to stronger than expected consumer prices in October an optimistic outlook from Federal Reserve Chair Jerome Powell.
EURUSD opened at 1.1004 and though the pair reached a high of 1.1011, it closed unchanged at 1.1004