Pound-Dollar Rate Draws Both Buyers and Sellers in the City as Election Looms

The Pound rose against all rivals Monday as Prime Minister Boris Johnson benefited from election developments that improve his chances of securing a majority in the looming December ballot although the outlook for the British currency continues to divide opinion in the City. 

Studies of the GBP/USD charts suggest immediate mild weakness on the horizon followed by a sideways trend and the possibility of eventual upside in the long-term.

The Dollar was firm early on Friday as other major currencies softened although it could remain supported in the weeks ahead because a much vaunted 'phase one deal' between the U.S. and China is now in the price of financial assets but is still to actually materialise, some analysts say. 

The Dollar index softened Wednesday as major rivals including the Pound and Euro recovered from earlier losses but the greenback's weakness is unlikely to be sustained for long until some time in the new year, analysts say, when it will have to contend with an offshore economic recovery and the 2020 presidential election.

The Dollar built on earlier gains Tuesday after the Insitute for Supply Management (ISM) services PMI surprised sharply on the upside for the month of October, leading the greenback to advance against all rivals, but some analysts are warning that the writing's on the wall for the U.S. currency. 

The Pound lagged many of its major rivals in a global pushback against the Dollar Tuesday amid uncertainty and unease over the likely outcome of a looming general eleciton, although some say the British currency could be further weighed down in the weeks ahead by narrowing opinion polls. 

The Dollar advanced against most rivals Monday as the dust settled on last week's interest rate cut from the Federal Reserve (Fed) and raft of trade related headlines, which have for the time being at least, placed a floor under the U.S. currency.

Studies of the GBP/USD charts suggest the short-term uptrend will probably extend, particularly now a break above the major trendline has been confirmed.