Money Pound down further as opinion poll shows Labour chipping away Tory lead

12:35  27 may  2017
12:35  27 may  2017 Source:   Press Association

This Is What the Size of May's Majority Means for the Pound

  This Is What the Size of May's Majority Means for the Pound Currency traders are setting Prime Minister Theresa May a low bar on the majority her party should win at next month’s election in order for the pound to emerge unscathed. While some betting markets and models have predicted that May’s Conservative Party could win as many as 180 seats more than its rivals combined on June 8, even a 50-seat cushion may help sterling hold steady, analysts say.For some, the barrier is even lower. The pound may be punished only if the Tories fail to improve upon the 17-seat margin set at the last parliament, according to Lee Hardman, a foreign-exchange strategist at MUFG.

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The pound continued its slide against the dollar and euro on Friday after a shock opinion poll showed that Labour continues to eat into Theresa May's lead.

Sterling extended losses against the greenback, falling 0.5% to 1.28 US dollars having risen above 1.30 just days earlier.

Against the euro, the pound slumped 0.4% to 1.14 euro.

The Conservatives' advantage over Labour has narrowed to just five points in the first opinion poll taken since Monday night's suicide bomb attack in Manchester.

A YouGov survey put the Conservatives down a point on the previous week on 43% and Labour up three on 38%, with Liberal Democrats up one on 10% and Ukip up one on 4%.

FTSE 100 at all-time high, with the pound knocked below $1.29

  FTSE 100 at all-time high, with the pound knocked below $1.29 The FTSE 100 was at an all-time high Friday, as the pound dropped against major rivals after a poll showed a further narrowing of the Conservative Party’s lead before the general election. The FTSE 100 (UK:UKX) was up a modest 0.2% to 7,534.13, but losses for financial and oil and gas shares limited the overall gain. Still, the index notched an intraday high of 7,535.06, according to FactSet data. For the week, the benchmark was on track for a gain of 0.8%. Friday’s session kicked off with the pound under pressure and oil prices flipping higher after an OPEC-related selloff. The pound (GBPUSD) bought $1.

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Craig Erlam, senior market analyst at Oanda, said: "Sterling fell again overnight after a poll showed the gap between Theresa May's Conservatives and Jeremy Corbyn's Labour party has narrowed again.

"Coming on the back of losses yesterday, it's turning into a rotten end to the week for the pound. What's more, with it having broken below 1.29 against the dollar overnight, it could be facing further misery in the near-term."

The pound has plummeted since Britain voted to quit the European Union as confidence in the country's economic prowess has evaporated.

Yesterday, official figures showed that the economy suffered an even deeper slowdown at the start of the year as the services sector came under pressure and inflation dealt a blow to household spending.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.2% in the first quarter of 2017, revising down the figure from its initial estimate of 0.3%.

Mr Erlam added: "The pair (pound and dollar) had been grinding higher for the last month and while it did manage to briefly penetrate 1.30 on a few occasions, the moves were always lacking conviction which suggested markets weren't happy at these levels.

"The break of 1.29 may well be the trigger for a correction in the pair, with 1.28 and 1.2750 being notable levels below."

Centre-left UK coalition might be positive for pound - JP Morgan .
Sterling looks set for a volatile run in to British elections next week but an argument can be made for markets reacting positively to a defeat for Prime Minister Theresa May's Conservatives, according to analysts from U.S. bank JP Morgan. The Conservatives' lead has shrunk in some opinion polls to as low as 5 percentage points from close to 20 points a month ago, driving the pound lower in the past week.That has seemed in line with traditional financial market logic, which has favoured right-leaning parties who keep a tighter rein on public spending over those like Britain's leftist Labour Party who want to tax and spend more.

Source: http://uk.pressfrom.com/news/money/-163114-pound-down-further-as-opinion-poll-shows-labour-chipping-away-tory-lead/

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