This morning's surprise election result, which has left the Conservatives on the cusp of a majority win, has given the pound a much needed boost following a week of uncertainty.
Prior to this morning's shock announcement GBP/USD exchange rates had slipped over 2.5% since the middle of last week, with the currency pair falling from just shy of $1.55 to 1.5099 on Monday.
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The news that David Cameron would resume his role as Prime Minister for a second term seems to have given investors renewed confidence and pushed the pound up across the board. In a matter of minutes the pound had gained around three cents against the dollar with GBP/USD climbing to a high of $1.5520 in the early hours of this morning.
I am sure we will see some movement over the course of the day as the markets continue to react but as it stands the pound and UK is in a much better position than 24 hours ago.
Shift if focus.
As the dust settles in the UK and the Tories start to celebrate, focus will now return to the U.S and the matter of interest rates.
Over the past few weeks I have mentioned on numerous occasions that the U.S. has been on an awful run in terms of economic data releases. This afternoon all eyes will be on the States again as the U.S release their latest job numbers.
As my regular readers will know the non-farm payroll numbers have the ability to impact the value of the dollar massively. Analysts are predicting that 228K were created last month but as we have seen before this actual figure could be well wide of the mark.
If the jobs reading misses the forecast level the dollar will come under pressure again and I wouldn't be surprised to see GBP/USD back over $1.56 later today.
A weaker jobs number would add to the States recent woes and could dent any chance of rate hike by the Federal Reserve in September, which in turn may weaken the dollar even more.
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