Since the fresh highs of 1.3749 hit last Thursday, sterling has gone through two consecutive days of losses against USD. At the time of writing it trades at 1.3634, as investors keep a close eye on political developments in the UK. Against the euro, sterling remains relatively stable and hovers around the 1.1965 mark and has traded within a 0.5% range for the past few weeks.
According to several news outlets, the latest election polls show Boris Johnson has lost support over the “partygate” scandal and the Tories have now fallen behind the Labour party. It’s too early to say whether a snap election will be called, but rising political tensions could make it difficult for GBP to attract investors.
In economic news, data from the UK shows the ILO unemployment rate declined to 4.1% from 4.2% as expected in November and the Claimant Count Rate modestly improved to 4.7%. Across the pond, the benchmark 10-year US treasury bond yield is at its highest level in two years near 1.85%, up more than 1% on a daily basis, as Russia-Ukraine tensions escalate and the rising Covid-19 cases in China seem to be weighing on risk sentiment.
- Consecutive days of losses for GBP against USD
- UK PM in dire straits and opening the door to political turmoil
- 10-year treasury bond yield at its highest level in two years
Have a good day.
Joseph Sidders, Relationship Manager.
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