Elsa Lignos, the Global Head of Strategy at RBC Capital Markets, recommended caution, however, saying: “[T]here is a historically high number of undecided voters which could affect as many as 80 marginal seats. We will be neutral GBP going into Thursday and look to trade the outcome.” Despite the poll results the GBP/USD exchange rate remained trading in a narrow range, with the US dollar still retaining some strength following last week’s impressive employment figures. The US non-farm payrolls figure detailed the largest increase in positions for 10 months.
A strong performance from the labour market pushed back expectations of a 2020 rate cut from the Federal Reserve and has restored some market confidence in the greenback.
Uncertainty around US-China trade developments has also lent support to the safe-haven US dollar, with concerns rising over whether deteriorating trade relations will have a negative impact on the American economy.
This follows comments from Larry Kudlow, the White House Chief Economic Adviser.
Mr Kudlow warned of the looming December 15 deadline for a new round of tariffs – costing $156billion – on Chinese imports.
Jeffrey Halley, the Senior Market Analyst at OANDA, highlighted the potential fallout between the two superpowers if Washington were to impose tariffs next week.
Mr Halley said: “China is clearly not immune to either the U.S. trade tariffs, or the lingering slowdown in the broader global economy.”
Looking ahead, we could see the pound edge higher against the US dollar tomorrow if the UK GDP figure for the third quarter confirms forecasts and rises from -0.1 percent to 0.1 percent.