Pound Rebounds From Early Lows Against Majors
December 11 2019 - 1:33AM
RTTF2
The pound gained mildly against its major counterparts in the
European session on Wednesday, after falling in the previous
session in the wake of an opinion poll showing a tighter
Conservative majority in the U.K. elections on Thursday.
According to a YouGov forecast on Tuesday, the Tories are
expected to win 339 of the 650 seats in the House of Commons,
Labour 231, the Scottish National Party 41, and the Liberal
Democrats 15.
The poll showed a majority of 28 seats for the Tories, down from
the 68 majority predicted in the previous MRP survey.
The latest poll raised the prospect of another hung Parliament
in Thursday's election.
Meanwhile, investors digested conflicting narratives on the
trade front. The Wall Street Journal reported that Washington is
laying the groundwork for a delay in the latest tariffs on China,
due to take effect on Sunday.
However, White House economic adviser Larry Kudlow said the
"tariffs are still on the table". Analysts say that a trade deal
might have to wait until after the U.S. presidential election in
November 2020.
The pound fell sharply in the Asian session following the
release of YouGov's poll overnight suggesting a smaller majority
win for the Conservatives than earlier predicted.
The pound recovered to 0.8426 against the euro, from a 5-day low
of 0.8461 seen at 5:15 pm ET. The pound is seen finding resistance
around the 0.82 level.
After falling to a 5-day low of 1.3107 at 5:15 pm ET, the pound
staged a brief recovery to 1.3156 against the greenback. The
currency is likely to face resistance around the 1.34 level.
The U.K. currency gained to 1.2958 against the franc, reversing
from a weekly low of 1.2899 hit at 5:15 pm ET. The next resistance
for the pound is likely located around the 1.31 area.
Following a 5-day low of 142.55 set at 5:15 pm ET, the pound
bounced off to 142.98 against the yen. The pound may locate
resistance around the 146.00 region, if it rallies again.
Data from the Bank of Japan showed that Japan producer prices
rose 0.2 percent on month in November.
That beat expectations for an increase of 0.1 percent following
the 1.1 percent drop in October.
Looking ahead, U.S. consumer price index for November will be
featured in the New York session.
At 2:00 pm ET, the Federal Reserve's interest rate decision is
slated for release. Economists widely expect the central bank to
retain the benchmark rate at 1.50 percent - 1.75 percent.
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