Labour lose ground on the Conservatives

GBP

The pound strengthened yesterday after recent polls showed an increase in support for the Conservative Party. This goes some way to allaying fears that their lead was receding after polls from last week showed the Labour Party gaining ground. Uncertainty has risen recently as a hung Parliament looked to be a real possibility, but the nervousness around this has relented.

USD

The dollar suffered yesterday after Donald Trump said a trade deal with China may have to wait until after the 2020 presidential election. This surprise statement reversed the recent news surrounding a trade deal, especially as market participants have been waiting for an outcome for some time. US consumer data has been strong recently due to the Christmas period, but investors are concerned that we will not see a dollar rally due to Trump’s focus on China and the increase of tariffs elsewhere.

Key Announcements

09:30 – GBP: Markit Services PMI (Nov); expected to remain at 48.6.
15:00 – USD: ISM Non-Manufacturing PMI (Nov); expected to fall to 54.5 from previous of 54.7.

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