Sterling Softens on Election Day Uncertainty

7 May, 2015

Despite the prospect of the UK General Election almost certain to result in a hung parliament, the markets have been relatively undeterred by the potential outcome in the past few days, however tension seems to be building with a weaker pound this morning. The outcome will not become clear until the early hours of tomorrow and even though the polls have consistently pointed to no clear winner, the huge amount of undecided voters could still tip the balance, you only have to look at the inconclusive polls in the run up to the 1992 election and subsequent decisive result. The first landmark to watch out for will be exit polls due for release shortly after 10pm UK time, which in the past two elections have proved to be quite precise, however this time round the race is so close, their accuracy will be in question.

But for the markets, it is the very fact that the result is so uncertain that investors are yet to make their mind up as to how to position themselves. As we go through the night and the picture becomes clearer there’s plenty of potential for volatility to pick up, especially since volumes will be thinner during the overnight session.

As mentioned for now sterling is a little on the softer side with GBPUSD hovering around 1.5200 and EURGBP marginally higher at 0.7465 (1.3390 for GBPUSD), meanwhile the FTSE 100 has commenced its session on a cautious note. The bias is to the downside for the pound as we go through the day with the greater risk from around 1am UK time as the results start to be revealed in full flow. If the polls turn out to be right then we could see a far messier situation than five years ago and negotiations could go on for longer than the five days it took for the previous Coalition to be formed, making the next few days a bit of a roller coaster ride for UK markets and investors.


Source link  
USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

Positive data negated by tax plan opposition

The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5%...

Data Boosts EUR Can CPI Boost USD?

EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition...


Chinese Data Disappoints

China’s economy has been robust throughout 2017 as a continued recovery in manufacturing and industrial sectors, a healthy property market...

Data & Polls Pressure Sterling

Sterling suffered downward pressure on Tuesday as the latest monthly report from the British Retail Consortium showed non-food sales slumping...

Closing the Year on a Strong Note

Data released on Monday indicates that the Eurozone economy is on target to close out 2017 strongly. The latest Markit composite PMI fell...


Sterling Falls on Rate Rise

In line with market expectations, the Bank of England raised the UK base rate to 0.5% (from 0.25%) on Thursday. The rise, the first in 10 years, was widely...

Another Political Headache for Trump

USD gave up some of its recent gains on news that investigators had charged President Trump’s former campaign manager regarding...

US Jobless Claims Lowest Since 1973

US Department of Labor released Initial Jobless Claims for the week ending October 13th that showed a resilient and stable labor market...

  


Share: