Home > Resource Hub > Daily Market News > Pound still dining out on Polls

Pound still dining out on Polls

Pound still dining out on Polls


Friday saw another opinion poll showing a 12-point lead for the Conservative’s and the  expectations of a Tory majority provided underlying Sterling support. Global economic optimism and hopes that trade volumes were stabilising also provided some underlying support. The Pound lost ground to a stronger Dollar, but found support close to 1.3100 and posted fresh trade-weighted gains. Futures market data showed short Sterling positions (bets against the Pound) had fallen to near 6-month lows. The potential for a position squeeze and short covering remains if sentiment remains stronger. 

Over the weekend, more opinion polls suggested that the Tory could have widened slightly which adds to Pound support this morning. Sterling is close 1.3170 against the Dollar and near 1.1900 against the Euro. 




US non-farm payrolls increased 266,000 for November, well above consensus forecasts of 180,000 and the October figure was revised significantly higher to 156,000 from the 128,000 reported originally. There was a significant impact from the return of striking auto workers which added over 40,000 manufacturing jobs with solid overall gains. Unemployment declined to 3.5% from 3.6%, although the participation rate declined slightly and the household survey reported that the monthly increase in employment was held to just over 80,000. Average hourly earnings increased 0.2% on the month, slightly below market expectations, although the year-on-year increase remained above 3.0% due to an upward revision for October. 

The data overall boosted confidence in the US outlook, reinforcing expectations of a steady Federal Reserve policy. The University of Michigan consumer confidence index strengthened to 99.2 from 96.8 with gains in the current conditions and expectations components. The dollar secured net gains with the Euro dipping below 1.1050 before a slight recovery.




The Euro is looking to extend its overnight bounce in European trading, as the Dollar retreats across the board in tandem with the US Treasury yields. 

Despite the fresh leg higher, the pair risks falling back into the red zone as the Dollar will likely remain buoyed by stronger US jobs data. On the other hand, ECBs President Lagarde, at her first monetary policy meeting this Thursday, will likely signal the commitment to the recent stimulus package that included a rate cut and the restarting of quantitative easing program.

On the docket today, markets now await the Eurozone Sentix Investor Sentiment data to confirm if the recovery has legs. Meanwhile, the latest above forecasts German Trade and Current Account data collaborate to the upbeat tone around the Euro. 


Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.