Sterling Gains Capped

GBP

Sterling gained on Thursday after two days of losses as financial markets awaited an election manifesto from the Labour Party. With three weeks before Britain votes in its second election in just over two years, Labour leader Jeremy Corbyn will be hoping his manifesto will help his party narrow the gap with Prime Minister Boris Johnson’s Conservatives whose lead is currently estimated around 14 percentage points. Both party leaders promise to end economic austerity and increase public spending ahead of the vote.

Sterling has gained more than 8% since the start of September as a no-deal Brexit looks less likely but gains have stalled over the past month as election uncertainty has risen. Sterling is likely to remain volatile from now until 12th December with uncertainty still remaining within the market.

USD

The dollar was slightly weaker against other major currencies on Thursday with investors waiting on the latest developments in a 16 month long trade dispute between US and China which has impacted the world economy. China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing amid continued efforts to strike at least a limited deal according to reports. Optimism is starting to build that a ‘phase one’ agreement could be sign soon.

Key Announcements

10:00 – EUR: Flash Manufacturing PMI – Forecast at 46.1 from previous 45.7
10:30 – GBP: Flash Manufacturing PMI – Forecast at 48.8 from previous 49.6
15:45 – USD: Flash Manufacturing PMI – Forecast at 51.5 from previous 51.3

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