Sterling Surges as Theresa May Calls for Snap Election

Sterling Surges as Theresa May Calls for Snap Election

The financial markets reacted to Theresa May’s announcement that there will be a snap general election on 8th  June, ahead of the upcoming negotiations with the European Union. Consequently, the Pound Sterling surged to six-month high and hit $1.2903 before settling to $1.2774.  In addition, the EUR declined vs. GBP and settled at 0.8305 (GBP/EUR inverse 1.2048).

Heading to America, the Greenback fell vs. JPY and settled at ¥ 108.43, negatively affected by the geopolitical tensions.

  • The dollar index .DXY, which measures the greenback against a basket of currencies, rose as much as 0.12% to settle at 99.63 pips.

Investors have shifted their investments to safe-havens assets and US treasuries due to US-North Korea tensions. The first round of the French elections on 23rd April has added further choppiness to the market.

Gold prices managed to settle above $1,288 as investors turned to gold as a safe-haven asset.

Oil prices edged lower yesterday to $52.08 per barrel, as official data showed that the US shale oil output in May is expected to dramatically increase, undermining OPEC efforts to support oil prices.  Meanwhile, Crude oil prices fell slightly as markets await the U.S. output and inventories data, which will be released later on today.

The most important economic events:

  • NZD Consumer Prices Index (YoY) (1Q): (GMT 22:45) – Important – Forecast (2.0%) – Previous (1.3%).
  • JPY Japan Buying Foreign Bonds (Yen) (APR 14): – Important – Forecast (N/A) – Previous ( -¥2176.8b).

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

CFDs and Spot FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based. Read More
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