The British pound is trading quietly in the Thursday session. In North American trade, GBP/USD is trading at 1.2930. It’s Election Day in the United Kingdom, and there are no British economic events. In the US, unemployment claims dipped to 245 thousand, but was higher than the estimate of 241 thousand. On Friday, the UK releases Manufacturing Production, which is expected to rebound and post a gain of 0.8%.
Britons are flocking to the polls across the country, as an election campaign marred by deadly terrorist attacks has ended. What started out as a cakewalk for Theresa May’s Conservatives has turned into a fiercely fought campaign, as May’s comfortable lead in the polls has been seriously eroded by the rejuvenated Labour party, lead by Jeremy Corbyn. May called a snap election just six weeks ago, and Brexit was supposed to be the primary issue facing voters. However, terror attacks in Manchester and London have left voters fearful about their safety, and the fight against terror has become the number one issue in the campaign. It remains unclear what the political landscape will look like on Friday morning. May remains ahead in the opinion polls, but the key, unanswered question is will she garner enough seats to win a majority. The markets have priced in a May victory, so the pound could bump a notch higher if she gets her majority. If not, May will only be able to govern at the grace of a hostile opposition. Such a scenario would seriously hinder May in upcoming Brexit negotiations with the European Union. If no party wins a majority, there is the possibility of Labor and the Liberal Democrats joining forces to form a coalition government, leaving the Conservatives in opposition. This would create even more uncertainty around Brexit and the pound could respond with sharp losses.
Washington is buzzing with excitement, as former FBI director James Comey is currently testifying before the Senate Intelligence Committee. Comey started off by saying that he was not specifically asked by President Trump to close an investigation into Trump’s alleged ties with Moscow, so it is unlikely that his testimony will be the “smoking gun” that leads to charges of obstruction of justice against Trump. Still, Comey’s testimony could raise troubling questions about Trump’s conduct, and will only complicate matters for the beleaguered Trump administration. Investors are growing more skeptical that Trump, who seems to be spending most of his time in damage control mode, will be able to deliver on key promises, and may come to view the president as a lame duck, just months into his presidency. This kind of sentiment could weigh on the US dollar.
Thursday (June 8)
- All Day – British Parliamentary Elections
- 8:30 US Unemployment Claims. Estimate 241K. Actual 245K
- 10:00 US IBD/TIPP Economic Optimism. Estimate 51.6. Actual 51.3
- 10:30 US Natural Gas Storage. Estimate 99B. Actual 106B
Friday (June 9)
- 4:30 British Manufacturing Production. Estimate 0.8%
*All release times are EDT
*Key events are in bold
GBP/USD for Thursday, June 8, 2017
GBP/USD June 8 at 12:30 EDT
Open: 1.2960 High: 1.2978 Low: 1.2908 Close: 1.2931
- GBP/USD was flat in the Asian session. The pair edged lower in the European session and is choppy in North American trade
- 1.2865 is providing support
- 1.2946 was tested in resistance earlier and is under pressure
Further levels in both directions:
- Below: 1.2865, 1.2706, 1.2571 and 1.2401
- Above: 1.2946, 1.3058 and 1.3120
- Current range: 1.2865 to 1.2946
OANDA’s Open Positions Ratio
GBP/USD ratio is unchanged in the Thursday session. Currently, short positions have a majority (60%), indicative of trader bias towards GBP/USD continuing to move lower.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.