In a week of fairly limited currency price action, the Dollar trade-weighted index is up for the fourth consecutive session, albeit by a modest cumulative 0.4%. Sterling is broadly unchanged over that period while the Euro has inched 0.2% weaker despite an up-tick in Eurozone core and headline CPI-inflation in April to respectively, 1.2% yoy and 1.7% yoy.
The GBP/USD cross has failed to remain above 1.30 where it had been relatively stable in the previous two sessions. Nevertheless Sterling has showed only limited reaction so far to local elections in part of the United Kingdom in which the ruling Conservative Party and to a lesser extent the main opposition Labour Party have lost a significant number of local council seats.
More than 8,200 seats were up for re-election in England Northern Ireland and the latest count shows that the Conservatives Party lost 438 or over a quarter of their seats, while Labour lost 79 seats (8%). Notably, the opposition Liberal Democrats and Green Party – which both fully endorse a second Brexit referendum – were the main beneficiaries, with the Liberal Democrats more than doubling its council seats to 562 while the Green Party increased its seat numbers from 6 to 46.
