Exchange Rates Today 06.12.2019 Edition: Pound Sterling On Top As Currency Markets Bet On Tory Majority, Euro Up, Dollar Tipped To Sell – Exchange Rates UK

– “GBP/USD traded higher yesterday for the fifth day in a row, reaching highs of 1.3166.” Barclays

– “The market continues to price in a Conservative majority and PM Johnson’s plan for his first 100 days in the office helped add to the optimism. The plan included delivering a budget and getting Brexit “done” by 31st January, with an initial parliamentary vote before Christmas (Bloomberg).”

– The Pound to Euro exchange rate was quoted at €1.18546 on 06.12.2019

– The Pound to US Dollar exchange rate was quoted at $1.31631 on 06.12.2019

Pound Sterling (GBP) Exchange Rates

The British Pound exchange rates were rallied against a basket of currencies on Thursday, December 5.

The Pound to Dollar exchange rate (GBP/USD) cleared $1.30 on Wednesday and bulls wasted no time to jump on this breakout on Thursday.

Rallying to 1.3160, Cable is looking extremely strong and appears to be taking its cue from polls suggesting that the Conservative party will manage to win a majority in the upcoming UK election.

The newswires are all talking about the 1.32 level being very significant resistance, so it will be interesting to see what Friday holds for the Pound.

Euro (EUR) Exchange Rates

Eurozone GDP hit expectations on Thursday but retail sales were still a disappointment. Regardless of this, the Euro was able to clamber above 1.11, breaking higher in tandem with the strong moves in Sterling as well as a steady environment. Tempering some of the optimism for the Euro after a string of nice PMI numbers was a weak German factory orders release, suggesting the vital automobile market might not be as strong as some might have hoped.

US Dollar (USD) Exchange Rates

The Dollar index has had a bad weak, and Thursday was more of the same as the British Pound grinds higher. The modest move in EUR/USD limited losses however, and the outlook actually firmed for the Dollar as some positive ADP employment data hinted that today’s jobs figure might be decent after all.

Kathy Lien at BK Asset Management is sceptical that payrolls will be impressive however, anticipating that anything less than a stellar number could send the USD to the downside,

“Economists are looking for the US to add 185K jobs in November, up from 128K in October. They are also looking for wage growth to accelerate and the unemployment rate to hold steady. While we believe that job growth improved over the last month, we are skeptical that it increased as much as 185K and anything short of 160K could trigger a sell-off in the US dollar”

“As the probability of additional US tariffs against China has been rising for several days, global economic growth might be torpedoed again at any time” says Marc-André Fongern, EMEA FX Analyst at MAF Global. “Given such a scenario, there would be virtually no alternatives to the US dollar. The United States and China may not reach a partial agreement within the coming weeks, so I consider the New Zealand dollar to be temporarily overvalued. The arithmetic of the currency markets has hardly changed, i.e. in case bilateral relations continue to deteriorate, as I currently assume, the Australian dollar and the NZ dollar in particular would remain largely at risk. The respective central banks are likely to be on alert!”

OTHER MAJORS

A cagey day for the Japanese Yen saw USD/JPY moving lower as stock markets trended mostly sideways. There is plenty of risk this weekend with the possible implementation of fresh tariffs on China, as well as continuing problems in Hong Kong, so it’s unsurprising to see the Yen retaining a firm tone. The latest in a long line of horrific Japanese data came in the form of household spending, which plummeted 11% MoM in October.

The Canadian Dollar exchange rates moved sideways against the US Dollar despite the important Ivey PMI rising more than expected. Low volatility in stock markets and no real trade war headlines also had AUD/USD flat on the day.

THE DAY AHEAD

Naturally the US jobs report today is one of the most important events for exchange rates in the whole month, and non-farm payrolls, unemployment and wage growth the most important aspects of this released.

Volatility is eforecast across all the majors, not just the US Dollar, with USD/CAD a prime candidate as Canada also releases unemployment stats.

Michigan Consumer Sentiment rounds out a busy week of global economic data.