Election jitters continue to grip pound

Unsurprisingly, the pound had election poll results to contend with yesterday.

 

Unsurprisingly, the pound had election poll results to contend with yesterday.

The pound has once again become a politically-correlated currency, following developments in election polls over economic data.

As a result, sterling continued to trend around its multi-week lows yesterday against many of its peers.

While the currency markets are scared by the latest UK election surveys, they’re not necessarily convinced.

According to a poll by Survation, the Conservative Party were only one point ahead of the Labour Party, while YouGov’s seat-by-seat projections were now indicating the Tories could end up 22 seats short of a majority.

The polls are causing much confusion.

While Survation’s poll puts the candidates neck-and-neck, the results are weighted according to whether or not the voters themselves say they are likely to actually go to the ballots.

Other surveys, which weight their findings based upon average turnouts for the respondent’s age or social group, for example, find differently.

So, while the currency markets are scared by the latest UK election surveys, they’re not necessarily convinced.

GBP/EUR declined even though, from a broader point of view, the euro wasn’t doing particularly well itself.

Data from the Eurozone was mixed, with retail PMIs weakening for Germany, Italy and the Eurozone as a whole, but strengthening in France. The German construction PMI also rose, while the Sentix investor confidence index beat predictions for June and Eurozone retail sales volumes outpaced estimates at 2.5%.

Weakness in the pound was the only thing that allowed the US dollar to make any gains, pushing GBP/USD marginally lower. Big things are happening in the US as well as the UK, so the currency markets were holding their breath for Thursday’s developments.

Today is the calm before a triple-whammy storm on Thursday, which is likely to see the pound stagnating against most of the major currencies.

An approaching election might be dragging force on sterling, but with other high-profile global happenings on the calendar, GBP could be afforded something of a reprieve.

 

 

 

 

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