Pound Spikes Up As Polls Suggest Tory Victory
December 04 2019 - 1:38AM
RTTF2
The pound appreciated against its major counterparts in early
European deals on Wednesday, as latest opinion polls suggested the
ruling Conservative party securing a majority at the upcoming
general election on December 12.
Survey by YouGov for The Times and Sky News showed Tuesday that
Tories had maintained its nine-point lead over the opposition
Labour Party.
The poll showed that Tory lead has fallen one point to 42
percent, while Labour was also down one point at 33 percent.
The survey was conducted between December 2-3.
It came after a Kantar poll put a 12 point lead for the Tories,
at 44 percent, as against 32 percent for Jeremy Corbyn's party.
Survey results from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK service sector
contracted the most in eight months in November but the pace of
decline was slower than initially estimated.
The final services Purchasing Managers' Index fell to 49.3 in
November from 50.0 in October. Although the reading was above the
flash reading of 48.6, the index signaled the steepest drop since
March.
Sentiment improved as encouraging Chinese data helped investors
shrug off concerns surrounding U.S.-China trade talks.
A report showed that activity in China's services sector
accelerated to a seven-month high in November, hinting at
short-term stabilization in the world's second-largest economy.
The currency held steady against its key counterparts in the
previous session, except the yen.
The pound climbed to an 8-1/2-month high of 0.8481 against the
euro, from a low of 0.8530 seen at 2:30 am ET. Next near term
resistance for the pound is seen around the 0.83 level.
Final survey data from IHS Markit showed that the euro area
private sector growth remained the lowest in six-and-a-half years
in November, signaling modest expansion for the fourth quarter.
The composite output index held steady at 50.6 in November. The
reading was slightly above the flash estimate of 50.3.
The pound firmed to a 2-day high of 1.2911 against franc, up
from Tuesday's closing value of 1.2822. If the pound rises further,
1.31 is likely seen as its next resistance level.
The U.K. currency rallied to 1.3063 against the dollar, its
biggest since May 6. The pair had ended Tuesday's trading at
1.2994. The pound is seen locating resistance around the 1.32
level.
After falling to a weekly low of 140.83 at 2:15 am ET, the pound
reversed direction, approaching near a 7-month high of 142.04
versus the yen. The pound may find resistance around the 144.00
level.
The latest survey from Jibun Bank showed that Japan services
sector moved back into expansion in November, albeit barely, with a
PMI score of 50.3.
That's up from 49.8 and it moves back above the boom-or-bust
line of 50 that separates expansion from contraction.
Looking ahead, at 8:15 am ET, ADP private payrolls data for
November is set for release.
The Bank of Canada's interest rate decision is scheduled for
release at 10:00 am ET. Economists expect the benchmark rate to be
kept unchanged at 1.75 percent.
Simultaneously, ISM services PMI for November will be
featured.
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