A Conservative victory is generally considered to be better for the pound due to the expectation that it would bring an end to Brexit uncertainty and the current instability, so any signs that the Tories may not secure a majority are GBP-negative. The US dollar was also able to edge higher against the pound following today’s release of September’s US housing price index, which beat forecasts and rose from 0.2 percent to 0.6 percent.
Craig Lazzara, the Managing Director at S&P Dow Jones Indices, said: “It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend.”
The “greenback” has also continued to benefit from yesterday’s hawkish comments from Jerome Powell, the Chairman of the Federal Reserve, who said that the US economy’s glass is “more than half full”.
USD benefited from Mr Powell’s comments that the fed would remain “strongly committed” to its 2 percent inflation goal, with investors relieved that the central bank is now unlikely to cut interest rates again in the near-term.
However, hopes of a US-China “phase one” trade deal being agreed before the New Year have clipped some of the US dollar’s gains today, with investors seeking out riskier assets instead.
We could see the pound US dollar exchange rate claw back some of its losses tomorrow if the US durable goods orders confirm forecasts and come in at -0.7 percent.
Influential UK data is lacking, so GBP exchange rates will continue being moved by the latest political headlines and polling figures.