Election polls leave pound shaken, poor US data impacts USD

Election fears continued to grip the pound last week, with polls varying wildly in their findings. UK data was largely positive, with the manufacturing and construction PMIs both beating forecasts to show resilience in the face of the uncertainty surrounding Brexit.

GBP/EUR entered the weekend at a twelve-week-low of around €1.1409, while GBP/USD managed to rise to $1.2888, although this was still much lower than the highs of the week before.

Pound

The pound had a volatile few days last week, ending Friday higher versus the US dollar and Australian dollar, but lower against the Euro and New Zealand Dollar. While the latest private sector surveys were positive, election fears and strength in other currencies prevented GBP from achieving impressive gains.

Euro

Overall, data last week showed that the Eurozone’s economic recovery is continuing. While the approach of key US data unsettled EUR exchange rates, EUR/GBP was able to end the week around £0.8752, with EUR/USD at $1.1281.

US dollar

Market confidence that the Federal Reserve will raise interest rates this month took a hit last week after disappointing employment data. This saw USD/GBP ending the week down at £0.7757 and USD/EUR at around €0.8863.

Australian dollar & New Zealand dollar

Commodity fears and a focus on the US weighed on the Australian dollar last week, with AUD/GBP ending the week below opening levels at around £0.5773. Some of the same factors affected the New Zealand dollar, although some positive statements about the strength of the domestic economy helped NZD/GBP to end the week higher at around £0.5542.