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.
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.
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.
 | 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).
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.
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