The pound finished Wednesday’s session at US$1.2926, approximately the same level that it had started at versus the dollar. The pound US dollar exchange rate is advancing in early trade on Thursday.
The pound struggled to gain traction in the previous session as investors continued to analyse the head to head TV debate between Boris Johnson and the labour leader Jeremy Corbyn. The poll following the event showed that the two leaders were almost on a par with Boris Johnson gaining 51% of the votes whilst Jeremy Corbyn picked up 49%. However, both leaders being on an equal footing, could be considered a weak result for Boris Johnson who was supposed to be well ahead of his Labour peer.
The pound continues to track the odds of the Conservatives winning the election on 12th December and winning with a clear majority. A strong Tory win would boost the chances of the UK leaving the EU by 31st January with a deal in place. Fresh polls showing that Boris Johnson has retained a solid lead, with almost one in five Labour voters looking to vote Conservative; the pound is advancing in early trade on Thursday.
Investor could turn their attention briefly to public sector net debt data today. However, any data will play second fiddle to election headlines.
FOMC Minutes A Non-Event
The dollar traded flat on Wednesday versus most its peers as investors weighed up the minutes from the latest Federal Reserve monetary policy meeting. There were no great surprises from the minutes, particularly as Federal Reserve Chairman Jerome Powell aired his opinions before Congress last week. In summary the Fed cut rates at the end of October owing to global risks. However, policy makers believe that political risks to growth have eased since the end of the summer. There were no hints over future policy moves. The dollar barely acknowledged the release.
Trade continues to be the central fixation for dollar investors. The dollar advanced as the prospects of a deal before Christmas are slipping away. Consequently, investor’s sough the safe haven properties of the greenback.
Today there is just mid-tier data to be released meaning that trade will remain front and central in investors’ minds.
|What do these figures mean?|
|When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.
For example, it could be written:
1 GBP = 1.28934 USD
Here, £1 is equivalent to approximately $1.29. This specifically measures the pound’s worth against the dollar. If the US dollar amount increases in this pairing, it’s positive for the pound.
Or, if you were looking at it the other way around:
1 USD = 0.77786 GBP
In this example, $1 is equivalent to approximately £0.78. This measures the US dollar’s worth versus the British pound. If the sterling number gets larger, it’s good news for the dollar.