As election results from the US continue to trickle in, the pound sterling lost more than 1% versus its US counterpart. Analysts say that though there are still mail in ballots to be counted, market sentiment has shifted to a higher risk environment. While Brexit will continue to weigh on sentiment for the pound, there is now some hope that a favorable trade deal between the UK and the US will be worked out, which is helping to improve the outlook for sterling. As regards the Brexit, leadership in both parties are planning to meet next week in order to further the discussions on a trade deal.
In London trading as of 10:41 am, the GBP/USD was trading at $1.2976, down 0.691% and moving off the session trough of $1.29139. The EUR/GBP was trading higher at 0.9004 pence, a gain of 0.4305%; the pair has ranged from a low of 0.89444 pence to a peak of 0.90330 pence. The GBP/JPY was trading at 135.922 yen, down 0.5524% and off the session high of 137.404 yen.
EU and UK PMIs Better than Expected
In the UK and the Eurozone, a release of PMI surveys for the services sectors has been released. In Germany, the largest economy in the EU, the services sector PMI for October came in with a reading of 49.5, helping to bring the composite PMI to 55; both readings were better than analysts had predicted. While France's services sector met analysts' expectations with a reading of 46.5, the composite was better than expected at 47.5. In the EU, the services sector reading was 49.5, higher than the 48.9 predicted, and the composite PMI was at 50, above the 49.4 forecasts. The EUR/USD was trading at $1.1688, down 0.3088%.