We moving this site to another server, please ignore some errors until this is completed!Pound Sterling holds gains following a landslide Labour win
- The Pound Sterling strengthens due to a decisive victory for Keir Starmer’s Labour Party.
- British Prime Minister Rishi Sunak acknowledged his defeat in the national election on Friday, announcing that the opposition Labour Party had won.
- The forecast for US Nonfarm Payrolls suggests an increase of 190,000 new jobs, down from the previous reading of 272,000.
The Pound Sterling (GBP) continues its winning streak on Friday. As UK election results are being declared, exit polls predict a landslide victory for Keir Starmer’s Labour Party, expected to win 410 seats in the 650-seat House of Commons, while the Conservatives are projected to secure 131 seats. The outcome of the election should be clear by early Friday.
United Kingdom’s (UK) Prime Minister Rishi Sunak conceded defeat in the national election on Friday, acknowledging that the opposition Labour Party had emerged victorious. “The Labour Party has won this general election and I have called Sir Keir Starmer to congratulate him on his victory,” Sunak said after winning his parliamentary seat in northern England, per Reuters.
Derek Halpenny, head of FX research at MUFG Bank Ltd., suggests that a Labour landslide could be advantageous for the Pound Sterling. A substantial majority would grant Labour a strong mandate for governance, potentially leading to greater political stability.
Read More: How could the UK general election impact the Pound Sterling?
The US Dollar (USD) struggles due to softer US data, fueling speculation that the Federal Reserve (Fed) might reduce interest rates in 2024. The key highlight on Friday will be the release of US employment reports, which are expected to show a slowdown in employment growth in June. The US Nonfarm Payrolls (NFP) are expected to show an increase of 190,000 new jobs, down from the previous reading of 272,000.
Daily Digest Market Movers: Pound Sterling rises as US data raise odds of Fed rate cuts
- The ADP Employment report showed that US private businesses added 150,000 workers to their payrolls in June, the lowest increase in five months. This figure fell short of the expected 160,000 and was below the downwardly revised 157,000 in May.
- US ISM Services PMI fell sharply to 48.8 in June, marking the steepest decline since April 2020. This figure was well below market expectations of 52.5, following a reading of 53.8 in May.
- Federal Reserve Bank of Chicago President Austan Goolsbee stated on BBC Radio on Wednesday that bringing inflation back to 2% will take time and that more economic data are needed. However, on Tuesday, Fed Chair Jerome Powell said that the central bank is getting back on the disinflationary path, per Reuters.
- The Minutes from the Federal Reserve’s June 11-12 monetary policy meeting, released on Wednesday, suggested that Fed officials were in a wait-and-see mode. Some participants emphasized the CommitteeÂ’s data-dependent approach, with monetary policy decisions being conditional on the evolution of the economy rather than being on a preset path.
- The Pound Sterling (GBP) continues to gain ground as BoE policymakers remain concerned about persistent inflation in the UK service sector, preventing them from considering policy easing. In contrast, inflation in other sectors has significantly declined due to weak demand from both domestic and overseas markets.
Technical Analysis: Pound Sterling holds position around 1.2750
The GBP/USD pair trades around 1.2760 on Friday. The analysis of the daily chart indicates a bearish bias, with the pair consolidating within a descending channel. However, the 14-day Relative Strength Index (RSI) is above the 50 level, suggesting that any further increase could weaken the bearish outlook.
The GBP/USD pair may challenge the upper boundary of the descending channel near the 1.2780 level. A breakthrough above this level could potentially push the pair to test the June high around 1.2860.
On the downside, a significant support level is noted at the 21-day Exponential Moving Average (EMA) at 1.2701. If this level is breached, it may exert downward pressure on the GBP/USD pair toward the vicinity of the lower boundary of the descending channel, approximately around 1.2612.
GBP/USD: Daily Chart
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | Â | -0.09% | -0.08% | -0.37% | -0.05% | -0.12% | -0.06% | -0.15% |
| EUR | 0.09% | Â | 0.00% | -0.30% | 0.05% | -0.03% | 0.04% | -0.07% |
| GBP | 0.08% | -0.00% | Â | -0.29% | 0.05% | -0.03% | 0.03% | -0.10% |
| JPY | 0.37% | 0.30% | 0.29% | Â | 0.34% | 0.27% | 0.31% | 0.21% |
| CAD | 0.05% | -0.05% | -0.05% | -0.34% | Â | -0.08% | -0.01% | -0.13% |
| AUD | 0.12% | 0.03% | 0.03% | -0.27% | 0.08% | Â | 0.06% | -0.04% |
| NZD | 0.06% | -0.04% | -0.03% | -0.31% | 0.00% | -0.06% | Â | -0.13% |
| CHF | 0.15% | 0.07% | 0.10% | -0.21% | 0.13% | 0.04% | 0.13% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Economic Indicator
Parliamentary Election
The U.K. Parliamentary Election released by the United Kingdom Parliament elects 650 members to the United Kingdom’s Lower House of Parliament. It is a significant event to determine the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth in the u.K. The election might affect the GBP volatility.