Election Update Friday the 13th.
The Conservative Party have, at the time of writing, secured 364 seats which gives it a clear majority in Parliament and prompting Jeremy Corbyn to say he will not lead the Labour party into the next election. This also followed Jo Swinson’s loss in Dunbartonshire East and the Liberal Democrats have announced that she would be stepping down with a leadership contest that would be held in the New Year. Meanwhile, following the strong showing of support for the SNP, Nicola Sturgeon has vowed to demand powers for a Scottish independence referendum.
The result helped push the GBP/EUR rate to a high of €1.2080 which has not been seen since July 2016 and the GBP/USD rate to $1.3507 which has not been seen since May 2018. Since the market has opened this morning Sterling has dropped from those highs as the dust settles on last night’s results and focus turns to the next step in this process.
The focus will now turn to cabinet announcements and the next steps PM Johnson mentioned during his election campaign. Speaking earlier this month, PM Johnson presented his plans for the first 100 days of the new Conservative government, which suggested that he would seek to lay out his parliamentary agenda in a Queen’s Speech on the 19th December and aim to bring the Withdrawal Agreement back for a vote before Christmas!
While the UK election outcome helped lift market sentiment, so has reports on the newswires suggesting President Trump has signed off on a ‘phase 1’ trade deal with China, cancelling a new round of tariffs that were set for this weekend. Not much data due out today but the next week could be another big one for Sterling exchanges rates, with a full data calendar and PM Johnson looking to possibly get his withdraw deal through Parliament.
Please note all Sterling exchanges rates all in a volatile state. Since the market opened this morning the GBP/EUR exchange rate has moved from the €1.2080's to €1.1950's and looks to have settled just at €1.20 for now!