The dominating news last week was the buildup to, and the results of, the UK snap general election. The pound saw slow but steady gains up until the results were released and it became clear that no one party had been able to secure a majority.
Tories lose House majority, GBP loses confidence
All the polls had pointed to a Conservative victory, with the possibility of the Tories picking up more seats in parliament and strengthening their majority. In reality, a surge of youth votes saw them losing 13 seats, while Labour picked up 30.
This shook confidence in the pound and saw it take quite a dip. It’s managed to stabilise, but there are still concerns over the strength of Prime Minister Theresa May’s hold on power, the amount of sway the Democratic Unionists will have on policy, and what impact this may have on the start date of Brexit negotiations.
More good news for the Australian dollar
Despite a slowdown in its growth, the fact that the Australian dollar registered any increase at all ensured it secured the world record for the longest period of recession-free expansion for a developed nation.
New Zealand’s dairy boost
The New Zealand dollar also saw a boost on the announcement that milk prices would take another hike. This boost was also helped by the fact that the euro, the US dollar and Sterling were all in decline.
US’s expected interest rate
While the AUD and NZD have seen increases, the expected announcement of an interest rate hike in the US to 1.25% is likely to see a shift in demand away from these Australasia countries. However, there is a chance that interest rates may stay where they are, which would support the two currencies.
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Whether it’s snap elections to the increase in the price of milk, the Forex market gives currency traders the opportunity to read the trends, predict the outcome, and potentially make a tidy income from their trades.
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