GBP/USD is up 0.2% today just under the 6 May high of 1.3185
It’s all about the election still for the pound as cable continues to knock on the door of the May high @ 1.3185 in trading today. As things stand, voting intentions continue to favour Boris Johnson and his Conservative party but traders aren’t getting too carried away.
The 1.3185 level is a key line in the sand alongside the 1.3200 handle for the time being. As such, any break higher towards 1.3400 and potentially 1.3500 will sit well within the realms of pricing in post-election optimism for the pound in my view.
The main qualm I have with the current opinion polls is that all of them are showing varying degrees of how much a lead the Conservatives have. That to me is a big tell that the only thing that the voting intentions have right is that they are all wrong.
A 6-point lead makes a major difference to a 13-point going into the election and the wideness of that spread could say that this election may be a lot tighter than what markets are giving it credit for at the moment.
There is also the issue that these opinion polls cannot factor in Brexit sentiment as well as constituency voting intentions and as such, it could make things a fair bit more complicated in trying to judge election sentiment.
Well, either way, we only have two more days before the fireworks go off and hopefully that’ll help give the pound a good hint of where to go next towards the end of the year.