The Pound Sterling drifted lower against the US Dollar in early Asian trade after Boris Johnson called for a December 12th election in an attempt to break the Brexit deadlock. Analysts don't see any positive outcome for Sterling that an election might ordinarily bring, given the expected polling swings and the likely slowdown of investor inflows, at least until there is finally some clarity. FX traders are saying that that that lack of clarity is likely to provide the Euro with a boost. Earlier this week, EU member states postponed a decision on the Brexit extension request. The rising uncertainty over the British geopolitics, coupled with the looming Brexit deadline, are weighing heavily on Sterling.
At 9:34 am in Tokyo, the EUR/GBP pair was trading higher at 0.8644 Pence, a gain of 0.0509%; the pair earlier hit a peak of 0.86536 Pence. The GBP/USD is at $1.2843, down 0.0117%; the pair is ranging from $1.28324 to $1.28615.
EU Markit Surveys Disappoint
In the Eurozone on Thursday, preliminary Markit surveys for October were disappointing for the EU's largest economy, with Germany's readings missing expectations across the board. France's manufacturing, services and composite readings were all unexpectedly upbeat but still not good enough to change the outcome of the overall Eurozone readings. Also in the EU, the ECB releases its policy decision and, as predicted, held rates at current levels with the lending rate at zero and the deposit rate at -0.5%.