The pound was down 0.1% against the dollar and euro on Monday as investors are fully focused on the December 12th general election as parties have begun launching their campaigns. In the meantime, the UK PMI data showed that construction shrank for the sixth consecutive month in October though this had little impact on the pound. Data is largely being seen as irrelevant in light of the election though traders are still taking some comfort in the risk of a no-deal having been reduced.
With the outcome of the election still very uncertain, investors will avoid heavy betting on UK assets as most polls still show around a significant 20% of UK voters are still undecided.
GBPUSD opened at 1.2938 and slipped across the day, closing at 1.2908 and falling further to 1.2876 in the early evening
GBPEUR opened at 1.1592 and fell to a low of 1.1572 before climbing back up to close at 1.1582
The dollar made gains on Monday for the first time after a consecutive week of losses. Investors still bought safe-haven assets despite the increased risk appetite that followed optimism on a trade deal being agreed by the US and China. Investors are positive about the outlook for the dollar as The Federal Reserve has said it will pause its rate cutting cycle.
The dollar index was up 0.3% while the euro fell by the same proportion against the dollar. However, analysts remain positive about the outlook for the euro as trade tariffs have been delayed and there have been positive conversations between carmakers in the US, EU, Japan and Korea.
Elsewhere the dollar was 0.4% higher against the Japanese yen and 0.2% higher against the Swiss franc. The Chinese yuan hit a 12-week high against the US dollar as risk sentiment continues to improve.
EURUSD opened at 1.1174 and fell steadily across the day, closing at 1.1145
