Britain’s pound was the main mover among major currencies on Monday, recovering some ground after weekend polls showed Prime Minister Theresa May is set to win next week’s elections even if the scale of victory is in question.
Sterling had its worst day since early February on Friday and fell around 2 cents last week as polls showed May’s lead over the opposition Labour Party had shrunk from as much as 20 points last month to as low as 5 in one poll.
More surveys over the weekend confirmed the trend but also showed that May’s Conservatives still lead and should win – just potentially not by the landslide she had targetted when calling the election six weeks ago.
With London markets closed for a holiday, the pound rose 0.2 to 0.3 percent in thin trade in Europe, trading at $1.2837 and 87.07 pence per euro respectively.
The dollar, which also struggled last week in the face of receding expectations for a major boost for growth from the Trump administration, was roughly steady at $1.1185 per euro and 111.35 yen.
“A lot of what we are seeing is the after-effects of Friday’s news and data releases,” said Thu Lan Nguyen, a currency strategist with Commerzbank in Frankfurt.
“We have a little bit of dollar strength following better U.S. data and some hawkish comments from Federal Reserve officials. And we have a little bit of a pound recovery following the latest poll results from the UK.”
The dollar index, which tracks the U.S. currency against a basket of six other major currencies, was lower at 97.366 but above last week’s nadir of 96.797, its lowest since Nov. 9.
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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