Sterling rose against the dollar and the euro this morning after weekend polls suggested the upcoming election may not result in a hung parliament.
Pound Sterling – UK Markets
AT 0937 GMT this morning the Pound traded at 1.5016 against the US Dollar after polls provided some possible clarity regarding election results. One opinion poll over the weekend showed that the Conservatives extended their lead over Labour which had a positive effect on the Pound in the currency exchange market.
Traders said sterling also gained as investors covered short positions, with data showing speculators raised bets against sterling to their highest level since at least 1999.
Investors remained cautious, however, as a hung parliament after an election expected in May remains a real possibility.
US Dollar – US Markets
The Dollar has begun to slip back against the Pound and the Euro but has made some positive gains of late as the US economy continues to provide good data. The Existing Home Sales report rose by 5.02M, the Core Durable Goods Orders rose by 0.9% and, more significantly, the weekly Unemployment Claims showed one of the lowest amounts of weekly jobless claims since the recession began.
At 0957 the greenback traded at GBP0.6701 and 0.7439 versus the Euro. The main news event this week is the US Non-Farm Payrolls report due Friday. Traders are also advised to follow the ADP forecast which is scheduled for Wednesday.
Euro – European Markets
The Euro has continued to gain ground in early trading after last weeks accord by European leaders with respect to emergency help for Greece.
Between now and the end of May Greece need to raise around €20bn and with Greek bond yields at current levels, this could prove quite an expensive process unless these yields start to slide back. At 1006 GMT the single currency traded at USD1.3441 and GBP0.9006 in the currency exchange market.
EU consumer confidence released later today is expected to show a rise from last months 95.9 to 97.1 and this has supported the Euro in the short term, while German inflation data is also expected to show positive signs.
Other Currencies – Highlights
The yen fell for a fourth day against the euro, the longest losing streak in five weeks, as signs the global economic recovery is gathering momentum boosted demand for higher-yielding assets.
Australia’s dollar strengthened for the first time in four days after Reserve Bank Governor Stevens said house prices are “getting quite high” and signaled interest rates may need to be increased further.
For the best currency exchange rate for your money transfer, call us now on +44 (0)20 7740 0000
Sterling Rises Sharply on Renewed Hopes of the UK Leaving With a Deal
Dollar Rises Modestly on FOMC Minutes
Sterling Rises on Hopes of EU Softening Tone on Backstop