The pound made further gains on Monday as polls continue to show that the Conservatives have a large advantage for the December 12th election. A recent poll showing that this lead was narrowing will likely keep the pound under $1.29. It gained 0.4% on the lows that it hit on Friday after poor PMI data highlighted the weakened state of the UK economy.
Against the euro, the pound gained 0.5% as the bookmakers now predict a Conservative majority of around 50 seats. However, a Reuters poll yesterday showed a drop in support for the Conservatives, down to 41%, and increase in support for Labour, at 34%. The pound is unlikely to gain much more support from news that the Conservatives are likely to win a majority
GBPUSD opened at 1.2871 and climbed across the day, reaching a high of 1.2907 and closing at 1.2886
GBPEUR opened at 1.1667 and rose more sharply across the day, hitting a high of 1.1722 and closing at 1.1702
There was some positive news on the US-China trade front, after media report indicated that the two sides were very close to a “phase one” trade deal. The dollar index was up 0.03%.
The greenback was up 0.29% against the Japanese yen which lost as risk appetite improved. This was also aided by news that China was planning to increase penalties on intellectual property violations.
Some analysts are struggling to be overly enthusiastic about this news as this would not be the first time where an agreement has appeared imminent before suddenly hitting another dispute. Safe haven currencies like the yen and Swiss franc will remain supported for that reason despite positive news.
EURUSD opened at 1.1031 and dropped sharply in the morning to 1.1014 and remained steady for the rest of the day, closing at 1.1012