After reaching a near 7 month high earlier in the week, the pound stuck to tight ranges on Friday as it awaited any further developments in the lead up to the general election. It mostly held on to gains made after a YouGov poll was released on Wednesday, showing a comfortable Conservative majority. Today, it is weaker against the euro and the dollar, but is still sticking to a narrow range ahead of the election.
Despite this, it’s thought that the markets are not fully pricing in the Conservative lead, showing that we can’t truly know what the outcome will be. It’s possible, therefore, that we could see more sterling volatility as the election nears. Yesterday, key figures from parties clashed in a television debate, addressing topics such as the NHS, Brexit and terror legislation.
Today, we’ll see the release of Manufacturing PMI, which is expected to show a slight rise, but still stay in contraction territory. This week we’ll also see Services and Construction PMI. The Bank of England will hold their Financial Policy Committee meeting on Tuesday. It will be interesting to see if any officials vote for a rate cut this time, after two raised their hand at the last meeting.
