Pound pairs in retreat again as the week comes to a close
It's not been a good week for the UK 26 May
Monday's tragic events in Manchester have cast a sad shadow over the whole week, and will continue to do so.
Campaigning for the 8 June General Election was rightly put on hold but has now resumed and PM May's hope to fight it on purely a Brexit/fear of negotiations basis has been derailed as highlighted by the latest opinion polls. I will stress again I have no political bias here, and remain just a more than interested observer.
I cast doubt at the outset, for a number of reasons, over the assumed landslide victory expected for May and I suggested a short Tory seat play much to the amusement/scorn of my regular detractors. The margin of victory is now at the very least in greater doubt. Polls are always there to be proven wrong as we know but similarly the political landscape globally has shifted too in recent times.
In any case it's put another wobble under the pound quite apart from the on-going state of the UK terrorist alert at "critical" with all police leave cancelled and 3800 soldiers ready to be deployed on our streets.
Ironically/perversely a large Tory majority suggests a harder line of Brexit, ,imho, and hence uncertainty for the pound initially at least until the facts become clear. A narrow lead/majority, as she has now points to a softer Brexit which might be considered better for the pound. Keep up at the back!
Little surprise then that markets have been trading tightly of late especially when you throw in the Trump factor and uncertainty over a US interest rate hike.
The latest UK election poll now seems to have tipped the scales a little bit and we've seen GBPUSD down to 1.2867 after its last hurrah above 1.3000 yesterday into the Q1 GDP second reading. EURGBP remains underpinned and testing 0.8700-20 resistance.
Overall the pound has lost a bit of its recent Teflon-coated appeal with GBPJPY a prime mover again but, whilst I continue to play from the short-side in my rally selling/jobbing I don't see any great collapse at this point. Still ranging in essence but with a softer bias.
The jury remains very much out but we'll know a bit more on the 9th June.
May - Did she assume too much when calling the snap election ?