- UK currency appreciates on rapid political developments – Leadsom quits leadership race, May wins by default
- May seems set to become next PM – Committee officials declares no further candidates
- US Dollar maintains gains from last week – Supportive jobs data bolstered US economy
- Further UK leadership developments may be due – US labour data due out
The Pound has been on a rollercoaster today, having started on a low note but since soared against peers on fast-moving developments in the Conservative leadership contest.
The US Dollar has been consistently high since trading began, having been held up by prior positive data.
UK Economic News: Sterling Jumps as Leadsom Exits Conservative Contest
The Pound started the day off on a low note, but in a short space of time has leapt up due to signs that the issue of leadership of the UK may be resolved sooner than most had thought.
The key development in question concerned Conservative MP Andrea Leadsom, who has pulled out of the running for party and national leader, stating:
‘I would have been deeply honoured to do it. I have however, concluded that the interests of our country are best served by the immediate appointment of a strong and well-supported Prime Minister’.
This has left Theresa May as the default winner of the contest, with the only question now being when she will take the reins for leading the UK. While rumours had been circulating that Michael Gove would make a reappearance to challenge May, the MP gave May his support after the news and 1922 Committee Chairman Graham Brady ruled out the contest reopening.
US Dollar Steady after Last Week’s Boost on Jobs Data
The appeal of the US Dollar to investors has been consistently high today, with gains mainly being continued from last Friday, when the national change in non-farm payrolls results for June came out.
While estimates had been for a rise from the previous 11k figure to 180k, the actual outcome of 287k was far better-than-expected and sent the ‘Buck’ on a time-delayed advance against its usual peers.
In other US domestic data, the news has emerged that despite the reluctance to economically commit by older citizens, young spenders have been buoying the US economy considerably of late.
Future GBP, USD Forecast: Further Leadership News Likely, along with Fed Speech
With no real UK domestic data due until tomorrow, the Pound could still be positively shifted this afternoon, if signs point towards a rapid transition of power from caretaker PM David Cameron to new presumptive May.
From the US, influence is set to come from two fronts, with the first being a speech from Fed official Esther George. Also due around the same time will be the Fed’s labour market conditions index result for June, which has a deterioration from -4.8 to -5 in store if forecasts are correct.
Current GBP, USD Exchange Rates
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.2976 and the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.5584 today.
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