Last week, the pound have its biggest weekly rise in over 2 months, despite consolidating on Friday. This was fuelled by expectations that the Conservative Party will win this week’s election with a strong majority, giving way to a more certain outcome on Brexit. This is seen as a pound positive because a decisive result and subsequent passing of a Brexit withdrawal deal would boost the economy as it can start to look past Brexit.
The dollar experienced a strong end to the week as data showed that the US economy created far more jobs than expected in November, reinforcing the Federal Reserve’s stance of keeping interest rates on hold. The data showed that nonfarm payrolls had increased by 266,000 jobs last months, beating expectations of 180,000.
Friday’s strong nonfarm payrolls number provided some respite for the dollar after soft data and pessimism from Chinese trade talks had kept pressure on the currency.