Currency news

Landslide brings Tories down

Head of FX Analysis at Equals Money
-
3
min read
Publish date
05/07/24
    • Labour win General Election, GBP remains elevated
    • Focus now falls on US jobs and French election


    Yesterday's currency recap

    So there you have it - Labour is on course for a 170 seat majority to topple the Conservative party in the General Election. Market reaction, as expected, is minor, with GBP supported and holding onto prior day gains. Markets in general were quiet yesterday, with the US closed 4th July celebrations.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.00 1.8962
    GBPCAD -0.06% 1.7371
    GBPCHF -0.12% 1.1486
    GBPDKK -0.06% 8.8041
    GBPEUR -0.06% 1.1804
    GBPJPY -0.17% 205.6740
    GBPNOK 0.24% 13.4784
    GBPNZD -0.10% 2.0858
    GBPSEK 0.19% 13.3964
    GBPUSD 0.19% 1.2764


    *Daily move - against
    G10 rates at 7:30am, 05.07.24

    ** Indicative rates - interbank rates at 7:30am, 05.07.24

    Key data points

    Currency Event Period Consensus Previous
    USD Non-Farm Payrolls Jun 190,000 272,000
    USD Unemployment Rate Jun 4.00% 4.00%
    USD Average Hourly Earnings Jun 3.90% 4.10%

    Upcoming speeches

    • None today.

    What we think

    With UK elections over, attention now turns to US jobs data today, as well the second round of voting in the French election over the weekend. Following on from Fed Powell's comments earlier this week, these numbers will be even move scrutinised in determining when the Fed will cut interest rates. As we can see above, there is an expectation of some slightly softer numbers which could well lead to higher odds of a September rate cut, and could well see GBPUSD have another go this year's highs.

    Polling projections in France continue to show Marine Le Pen’s National Rally and its allies will fail to get an absolute majority this weekend. EUR seems to be supported on this notion so far, but nonetheless for GBPEUR and EURUSD remains a big risk event over the weekend.

    Back to the UK and GBP, focus now falls back to data and when the Bank of England will cut interest rates. Odds of a 0.25% rate cut in August sits at 65%, with the next major data point out on the 17th July being the June CPI print.

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    About the author
    Thanim Islam
    Profile
    Head of FX Analysis at Equals Money

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