GBP/EUR Up 2%, GBP/USD Exchange Rate Jumps 1.5% as Exit Poll Sees Conservative Victory
Although the results of the UK election are still pouring in, the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates surged following the release of the exit poll.
The poll shocked markets by indicating that the Conservatives would take 316 seats – just 10 short of an overall majority.
Hopes that the Tories would remain in power and continue with current austerity measures saw the GBP/EUR pairing rally above 1.38 and pushed the GBP/USD exchange rate of 1.55,
GBP/USD Little Changed after US Employment Data, GBP/EUR Exchange Rate Stronger on Greek Speculation
The Pound Sterling to US Dollar (GBP/USD) exchange rate was little changed following the release of the US Initial Jobless Claims figure, despite the fact that the data showed applications for first time unemployment benefits holding at an almost 15-year low.
However, the Pound Sterling to Euro (GBP/EUR) exchange rate was able to advance above the 1.35 range as investors once again grew concerned over Greece.
While it had been hoped that the Syriza-led government would be willing to concede to a few things in order to reach an accord with its creditors, a government official asserted; ‘We won’t go beyond the limits of our red lines. It’s clear that we cannot cut pensions. […] When you negotiate, there should be mutual concessions.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.5229 while the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3499
As the most hotly-contested UK general election of recent years got underway, the Pound Sterling to Euro (GBP/EUR) exchange rate fell below 1.34 while the Pound Sterling to US Dollar (GBP/USD) exchange rate softened to 1.5191.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – German Factory Orders Disappoint but 2015 UK Election News Dictates Demand for Sterling
On Wednesday the Pound Sterling to Euro (GBP/EUR) exchange rate softened to 1.34 even as the UK published an impressively solid Services PMI for April.
While the Euro was supported by developments in Greece and improved services figures for several of the Eurozone’s largest economies, the Pound was feeling the heat as the latest polls put Labour and the Conservatives neck-and-neck in the race for Number 10.
The Pound Sterling to Euro (GBP/EUR) exchange rate hit a low of 1.3362
As it appears that neither of the major parties will command enough seats to form a government alone, the prospect of a hung parliament (and all the uncertainty that would cause) is limiting demand for the Pound.
The GBP/EUR exchange rate fell to 1.33 on Thursday in spite of Germany releasing some slightly disappointing domestic data.
German Factory Orders printed at 1.9% on the year, as expected, but failed to show the 1.5% monthly climb projected by economists.
Orders actually rose 0.9%.
However, the result was still positive given the negative figures recorded in the previous two months.
In the opinion of economist Johannes Gareis; ‘Domestic demand is the reliable driver of Germany’s growth. Worries about China and the US but also from the troubles with Russia, continue to weigh.’
Meanwhile, Germany’s Retail and Construction PMIs declined in April, although the Eurozone’s Retail PMI advanced from 48.6 to 49.5.
According to Markit, the data; ‘pointed to near stability in sales at the start of the second quarter. Growth of retail sales in Germany offset further, albeit slower, falls in both Italy and France, the former of which posted its least marked decrease for a year.’
Given the amount of focus being given to the UK general election, data is unlikely to have much of an impact on GBP/EUR trading today.
As the European session progressed, the Pound Sterling to Euro (GBP/EUR) exchange rate returned to trending in the region of 1.3422
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast – US ADP Employment Data Boosts Pound, but Pairing Falls Below 1.52
After the US ADP Employment Change report showed that the US added considerably fewer positions than expected in April, the US Dollar lost ground against several of its other most-traded currency counterparts.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a low of 1.5162
In the view of industry expert Robert Oak; ‘ADP’s proprietary private payrolls jobs report gives us another stunted employment preview by reporting a monthly gain of 169,000 private sector jobs for April 2015. Manufacturing jobs are truly a bad omen with 10,000 reported lost. Construction on the other hand is still in recovery with 23,000 April jobs gained. By the numbers the overall job growth appears to be decelerating, and ADP blames the collapse in oil prices. This report does not include government, or public jobs. The official BLS employment report will be released on Friday.’
The sub-par result ups the odds that Friday’s US Non-Farm Payrolls report will also disappoint and prevent the Federal Reserve from adjusting interest rates.
However, the GBP/USD exchange rate failed to hold the 1.52 level as election jitters got the better of investors.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: Who will Win the 2015 UK General Election? Labour, Conservatives Out in Front
Although an outright victory for the Conservative party is usually the most Pound-supportive outcome of a UK election, the tightness of the polls means that any party receiving enough of the vote to form a majority government would be Pound-supportive.
However, it looks as though neither of the frontrunners will secure enough seats – making a hung parliament the most likely outcome.
If this does occur both the Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Euro (GBP/EUR) exchange rates are likely to decline until negotiations are complete and a government formed.
Later today the US is due to publish initial jobless/continuing claims figures and Consumer Credit data. While these reports will be of interest to US Dollar traders, the situation in the UK will be dominating focus into the weekend.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7479, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5185, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 0.6585, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3368