Home Daily Commentaries Pound unmoved by Labour landslide

Pound unmoved by Labour landslide

Jake Trask
Written by
Jake Trask

Jake Trask

OFXpert

Based in London, Jake boasts a rich and extensive career in the foreign exchange industry, spanning 15 years.

| Friday 5 July, 2024

Daily Currency Update

Labour has taken power from the Conservatives in yesterday's UK General Election, winning by a landslide as predicted by polls since former Prime Minister Rishi Sunak called the election six weeks ago. Labour leader Sir Keir Starmer will assume office next week, with his party securing 409 seats, while a few of the 650 total seats remain to be called. Despite Labour winning only around 34% of the vote, the Conservatives were reduced to 122 seats, as Reform UK drew significant votes from the Tory base. Reform's leader, Nigel Farage, will become an MP for the first time, representing the constituency of Clacton.

Following the election call, the pound rose slightly and has remained elevated, with markets seeking stability after years of frequent leadership changes under the Conservatives since Brexit. Given the UK's precarious financial situation, significant fiscal changes are unlikely in the near term under the new government, which may also explain the pound's steadiness throughout the election campaign. Currently, GBP/USD is around 1.2780, with GBP/EUR remaining around 1.18.

Key Movers

There are significant upcoming events on both sides of the Atlantic. The US monthly jobs report is due at lunchtime today, with the headline US Non-Farm Payrolls figure expected to show an increase of 191,000 jobs in June and the unemployment rate predicted to remain at 4%.

On Sunday, the second round of the French parliamentary election will take place, with markets closely watching how many seats Marine Le Pen’s far-right Rassemblement National will secure. The tactical nature of voting in this election makes it difficult to predict the outcome. However, if RN achieves significant gains, we might see the euro fluctuate on Monday morning. Despite this uncertainty, EUR/USD has risen to 1.0825, as the dollar weakened following Wednesday’s significant ISM Services PMI miss.

Expected Ranges

  • GBP/USD: 1.2680 - 1.2860 ▲
  • GBP/EUR: 1.1765 - 1.1860 ▼
  • GBP/AUD: 1.8900 - 1.9070 ▲
  • EUR/USD: 1.0760 - 1.0910 ▲

Written by

Jake Trask

OFXpert

As a Senior Corporate Client Manager, Jake and his team manage a diverse portfolio of 250 businesses to meet their varied foreign exchange needs. He enjoys untangling the complexities of foreign exchange dynamics, constantly striving to provide clients with the most informed insights and strategies to navigate these fluctuations successfully.