Published On: Wed, Nov 20th, 2019

Pound US Dollar exchange rate: GBP/USD flat as TV debate not a “game changer” | City & Business | Finance

Sterling was left under pressure on Wednesday after last night’s debate between Prime Minister Boris Johnson and opposition leader, Jeremy Corbyn did not have a conclusive winner. The ITV debate was not seen as a game changer, and the fact the Conservatives didn’t extend their lead in the polls afterwards dampened pound sentiment. Commenting on this, Rabobank currency strategist Piotr Matys stated: “The debate was not a game changer for Sterling. The market reaction would have been stronger if Jeremy Corbyn had gained an advantage in the polls but that doesn’t appear to have been the case.”

While Mr Johnson continues to lead in the polls, last night’s TV debate was a “dead heat” according to YouGov’s snap poll.

With 51 percent of people feeling the current Prime Minister won, and 49 percent agreed Mr Corbyn performed the best, the debate was largely inconclusive.

Commenting on the poll, Political Research Manager at YouGov, Chris Curtis said: “On balance this is probably better for the Labour leader, why? Because a dead heat when you are significantly behind in the polls is probably better news for you that the person who is leading.

“It doesn’t seem from these initial numbers to be a game changing moment.”

Meanwhile, the safe-haven US dollar received an upswing of support as a lack of clarity on US-China trade negotiations and increased tensions in Hong Kong weighed on risk appetite. 

Tensions between the United States and China increased as the US Senate approved of bills to protect human rights in Hong Kong.

However, the Senate’s bill in favour of the Hong Kong protestors could complicate progress for a “phase one” preliminary trade deal.

In response, Beijing’s foreign ministry spokesperson called the actions blatant interference and said if Washington continued they would face ‘negative consequences’.

Looking ahead, the dollar could rally following the Federal Reserve’s FOMC minutes if the central bank is more hawkish than anticipated. 

Although, analysts expect that the minutes will have little impact as the Fed made it clear they were not going to cut rates any more this year, and commenting on this, head of FX Strategy at Société Générale, Kit Juckes said: “They were trying to engineer something that looked vaguely like a hawkish cut and that ought to be reflected in [the minutes].” 

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