Pound Soars on Expectations of Conservative Majority

GBP

The British pound strengthened against rivals supported by ongoing optimism over the coming elections results. The latest polls show that there is a high chance that Johnson could secure a majority, which would allow him to pass the current Brexit deal. The cable rose to a seven-month high of $1.3147, the GBPJPY climbed to 143.15, and the EURGBP declined to 0.8440, the lowest since May 2017.

USD

The dollar index, which measures the greenback against a basket of major currencies, finished lower for the fourth consecutive day, settling at 97.60. The recent US economic data continued to disappoint with ISM non-manufacturing PMI dropping to 53.9, and ADP Nonfarm Employment Change suggesting that the US economy created only 67000 jobs in November. The soft data raised the chances of further monetary policy easing by the Federal Reserve in the fourth quarter of 2020. However, the dollar was slightly stronger against safe-haven currencies such as the Japanese yen, supported by Bloomberg's report, which expressed optimism over trade between China and the United States.

Indices

Major US stock index futures recovered partial losses supported by renewed optimism over trade between China and the United States. A Bloomberg news report indicated on Wednesday that China and the United States are moving closer to a trade agreement, citing people familiar with the talks. The Dow Jones Industrial Average futures rose to 27727, the S&P500 futures climbed to 3116, and Nasdaq futures rallied to 8322.

CAD

The Bank of Canada concluded its monetary policy meeting by leaving interest rates unchanged at 1.75% as widely expected. The committee declared that the ongoing trade conflicts remained the most significant risk to the economic outlook and expected inflation to stay close to a 2% target over the next 2 years. The USDCAD tumbled to a one-month low of 1.3177, and the EURCAD declined to 1.4602.

Metals

Gold prices continued to trade in a tight range awaiting fresh fundamental drivers. The renewed trade optimism over China and the United States trimmed gold gains where the price of a gold ounce tumbled to $1473. Also, the price of a silver ounce fell to $16.80, and Palladium faltered at a record high of $1875 and dropped to $1860.

Oil

Oil prices edged higher on increased expectations of further supply cuts by OPEC+. The Organization of the Petroleum Exporting Countries is meeting today in Vienna and will meet with other oil producers tomorrow to agree on the supply quota for the coming period. On the other hand, the US Energy Information Administration reported a drop of 4.856 million barrels in US crude inventories last week. The West Texas Intermediate crude oil futures climbed $58.64, and Brent futures advanced to $63.49.

Major Economic Events

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