Currency news

UK General Election called for 4th July

Thanim Islam
Profile
Head of FX Analysis at Equals Money
-
3
min read
Publish date
23/05/24
  • GBP supported on less rate cuts expectation
  • Growth outlook in focus today


Yesterday's currency recap

GBP managed to hold onto some of the gains following the CPI report, but there seemed to be a lack of momentum perhaps caused by speculation over the course of the day that a snap election was going to be held on the 4th July. At the top end of the day we saw GBPEUR attempt the highs of 2024, and GBPUSD hit fresh two-month highs. Trading around USD was a bit more positive following a hawkish Fed minutes.

Today's GBP rates

Currency pair Daily move* Indicative rate**
GBPAUD 0.53% 1.9169
GBPCAD 0.27% 1.7401
GBPCHF 0.45% 1.1631
GBPDKK 0.30% 8.7631
GBPEUR 0.30% 1.1744
GBPJPY 0.34% 199.1860
GBPNOK 0.26% 13.6002
GBPNZD 0.10% 2.0843
GBPSEK 0.46% 13.6550
GBPUSD 0.13% 1.2727

*Daily move - against G10 rates at 7:30am, 23.05.24

** Indicative rates - interbank rates at 7:30am, 23.05.24

Key data points

Currency Event Period Consensus Previous
EUR HCOB Manufacturing PMI May 46.10 45.70
EUR HCOB Services PMI May 53.60 53.30
EUR HCOB Composite PMI May 52.00 51.70
GBP S&P Manufacturing PMI May 49.50 49.10
GBP S&P Services PMI May 54.70 55.00
GBP S&P Composite PMI May 54.00 54.10
USD S&P Manufacturing PMI May 49.90 50.00
USD S&P Services PMI May 51.20 51.30
USD S&P Composite PMI May 51.20 51.30

Upcoming speeches

What we think

On the data front, focus falls back on the state of each respective economy with the release of PMI numbers for the month of May. Also we have the release of Q1 wage growth from Europe, which will have an implication on how markets forecast future rate hike/cut projections to be conducted by the ECB over the course of the year. Of course, the big question on most client’s lips will be the impact of the general election on GBP. So far very little impact in markets, as focus in the FX space remains on interest rate policies by central banks. Labour is currently expected to win, according to polls, but should there be a possibility of a hung-parliament then we could see some increased volatility on GBP. But for now, GBP is supported on the basis that markets are pricing in less rate cuts expected this year.

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

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