The British pound strengthened against the other major currencies in the Asian session on Friday, as sentiment was bolstered on hopes that U.K.’s ruling Conservative party is on course to return to power for a second term.
According to the poll, the Conservatives are projected to get 316 seats in the 650-seat Parliament. The opposition Labour Party is expected to have 239 seats, while Scottish National Party on track to win 58 seats.
The Conservative victory is expected to set out clear deficit reduction plans for the economy and protect financial stability over the next five years.
In other economic news, data from the Lloyds Banking Group’s Halifax division showed that U.K. house prices advanced 1.6 percent in April from last month, when it gained 0.6 percent. This was the second consecutive growth in prices and exceeded a 0.3 percent rise forecast by economists. The annual rate of house price growth is forecast to end the year at 3-5 percent.
The Office for National Statistics is set to publish U.K. foreign trade data, due shortly. The visible trade deficit is seen at GBP 9.8 billion in March compared to GBP 10.3 billion in February.
Thursday, the pound fell against its major rivals, amid uncertainty relating to Britain’s election, due later in the day, with consensus pointing to a hung parliament and unstable coalition government.
The pound fell 0.44 percent against the euro, 0.23 percent against the yen and 0.64 percent against the Swiss franc on Thursday.
In the Asian trading today, the pound rose to more than a 4-month high of 185.76 against the yen, from yesterday’s closing value of 182.49. On the upside, 187.90 is seen as the next resistance level for the pound.
Against the U.S. dollar, the euro and the Swiss franc, the pound advanced to a 9-day high of 1.5492, an 8-day high of 0.7240 and a 1-week high of 1.4299 from yesterday’s closing quotes of 1.5240, 0.7387 and 1.4051, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.56 against the greenback, 0.70 against the euro and 1.52 against the franc.
Looking ahead, U.K. trade data for March is set to be published, shortly.
In the New York session, Canada housing starts and jobs data for April, U.S. jobs data for April and wholesale trade sales data for March are slated for release.
At 8:30 am ET, European Central Bank Vice President Vitor Constancio will deliver a lecture on “Reinforcing financial stability in the euro area” at OMFIF Golden Speaker Series, organized by Official Monetary and Financial Institutions Forum, in London.
Subsequently, Federal Reserve Bank of New York President William Dudley is expected to speak about community banking and small business lending at the Annual Bronx Bankers Breakfast in Bronx, New York at 9:45 am ET.
The material has been provided by InstaForex Company – www.instaforex.com