Sterling finished Tuesday’s trading session higher, despite opening lower against EUR and USD, as a You Gov poll showed the Conservatives had extended their lead in the polls.
As morning trade commenced, GBP was put under pressure as optimism surrounding the Brexit Party’s decision not to contest Conservative-held seats on the 12th December faded and UK labour market data slowed.
The release of the UK unemployment rate indicated that unemployment fell back to 3.8%, its lowest level since 1975, but the number of people in work had fallen by 58,000. This makes it the largest drop in employment for four years. Wage growth also underwhelmed investors as it fell 0.2% to 3.6%, despite being forecast at 3.8%.
As the afternoon session progressed, sterling began to recover as the latest You Gov poll showed the Conservatives had extended their lead in the polls. The latest polling showed the Conservatives with 42% share of the vote, compared to Labour’s 28%. This is significant for the GBP as the 14 point lead points towards a Conservative majority ,which would help Johnson pass his Brexit deal in the UK parliament.
08.00 – EUR: Harmonized Index of Consumer Prices (YoY) (Oct) Expected to remain at 0.9%.
10.30 – GBP: Consumer Price Index (YoY) (Oct); Expected to remain at 1.7%.
14.30 – USD: Consumer Price Index (YOY) (Oct) Expect to remain at 1.7%.