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GBP/USD Volatility Spikes Ahead of Key UK Election Poll - US Market Open

GBP/USD Volatility Spikes Ahead of Key UK Election Poll - US Market Open

Justin McQueen, Strategist

MARKET DEVELOPMENT –GBP/USD Volatility Spikes Ahead of Key UK Election Poll

DailyFX 2019 FX Trading Forecasts

GBP: Marginal gains for the Pound as market participants await the YouGov MRP poll at 2200GMT. As a reminder, this was the poll that had predicted a hung parliament in 2017, however, keep in mind that this poll had first been released during the 2017 election campaign. Nonetheless, overnight Sterling implied volatility are notably elevated at 11.05vols, which in turn signals an implied move of 62pips.

YouGov MRP Poll 2017 vs Actual Result

Election Model

  • Conservatives 302, Labour 269, Lib Dems 12

Actual Result

  • Conservatives 317, Labour 262, Lib Dems 12
GBP/USD Volatility Spikes Ahead of Key UK Election Poll - US Market Open

USD: The US Dollar picked up following a slew of better than expected economic data with the secondary GDP reading showing a 0.2ppt revision higher to 2.1%, while durable goods data had also surprised on the upside. (full report) In turn, the Euro edged below the 1.1000 handle with eyes on the Nov 14th low at 1.0987.

AUD: The Australian Dollar remained soft as the currency continued to digest the latest commentary from RBA Governor Lowe regarding QE. Reports from local banks note that they are more bearish on the RBA with Westpac calling for two 2020 rate cuts and H2 2020 QE, which in turn has seen the Aussie on the backfoot.

GBP/USD Volatility Spikes Ahead of Key UK Election Poll - US Market Open

Source: DailyFX, Refinitiv

Economic Calendar (27/11/19)

GBP/USD Volatility Spikes Ahead of Key UK Election Poll - US Market Open

Source: DailyFX,

WHAT’S DRIVING MARKETS TODAY

  1. US Dollar Buying Persists, CAD Longs Capitulate - COT Report” by Justin McQueen, Market Analyst
  2. Bitcoin (BTC) Price Analysis: Slump Stalls, Outlook Remains Negative” by Nick Cawley, Market Analyst
  3. EUR/USD: Downtrend Move Builds up Momentum - Euro vs USD Price Outlook” by Mahmoud Alkudsi, Market Analyst

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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