The Pound Sterling to Euro (GBP/EUR), Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Canadian Dollar (GBP/CAD) exchange rates were all trading significantly higher on Friday as the UK general election continued to unfold and it looked as if the Conservative government would remain in power with a majority win.
David Cameron is the first PM since Lord Salisbury in 1900 to increase vote share at next election after being PM for more than 18 months
— Andrew Cooper (@AndrewCooper__) May 8, 2015
As a result of the surprising spike in Conservative seats, the Pound Sterling (GBP) exchange rate registered its biggest jump versus the ‘Buck’ (USD) since 2009.The Pound Sterling to Euro (GBP/EUR) exchange rate posted its biggest daily gain in two years.
UK General Election Heads toward Conservative Majority Win – Pound Sterling Exchange Rate Jumps
The prospect of the current government remaining in power caused a massive shift in support for Sterling as investors calculated minimal disruption to the UK economic recovery.
Economist Jeremy Cook commented: ‘A majority wasn’t priced in… So everyone has been given a little more certainty than they expected.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Falls on Grexit Possibilities and German Industrial Production Disappointment
Meanwhile, the Euro is trading lower against other majors on account of a fall in German Industrial Production in March. The annual ecostat came in at 0.1% rather than the 0.5% forecast.
Economist Carsten Brzeski commented: ‘Today’s data have created uncertainty, rather than clarity. The German growth picture seems to be more mixed than buoyant sentiment indicators have been suggesting. Industrial production is clearly stagnating, reflecting still-weak demand from other Eurozone countries but also a continued investment drought.’
Additionally, ongoing negotiations between Greece and its creditors are continuing to weigh on the Euro as the risk of a Grexit appear to continually rise in the wake of no concrete deal.
US Dollar to Pound Sterling (USD/GBP), Euro (USD/EUR), Canadian Dollar (USD/CAD) Exchange Rates to fall if US Change in Non-Farm Payrolls Prints Unfavourably
The US Dollar (USD) is in for a majorly influential day on Friday with the release of the highly anticipated US Change in Non-Farm Payrolls and Unemployment Rate stats.
The US Dollar (USD) could be in for some significant swings after Wednesday’s ADP Employment Change failed to hit the 200K forecast in April, instead residing at 169K.
The ADP Employment Change stat is used as an indicator for Friday’s US payrolls number and has caused US Dollar weakness in the run-up to Friday.
Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate Forecast to fall on Canadian Unemployment Rate Increase
The Canadian Dollar (CAD) is also forecast for major movement on Friday with the North American nation releasing its own labour market stats. Canada’s Net Change in Employment and Unemployment Rate numbers are forecast to have a dramatic effect on the ‘Loonie’ exchange rate, particularly if the level of joblessness increases from 6.8% to 6.9% as forecast.
Additionally, Canadian Housing Starts data will also be out and could moderately impact the Canadian Dollar to US Dollar (CAD/USD), Canadian Dollar to Euro (CAD/EUR) and Canadian Dollar to Pound Sterling (CAD/GBP) exchange rates.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trading at 1.8661. The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5416; the Pound Sterling to Euro (GBP/EUR) exchange rate is trading at 1.3746.