The pound sterling remained relatively calm during London trade on Tuesday, neutral versus its European counterpart and higher against a softer greenback. Most FX players are anxious to see how today's US presidential election will play out, given that the pound is likely to take some direction from the outcome of the election. Analysts say that the pound's impact as a result of Brexit is relatively uncertain and could go either way. Volatility for sterling was at a multi-months peak, however, at almost 19% as markets ponder the outcomes of both major events. This week's news of England in full lockdown mode as a result of a second wave of Covid-19 infections is also weighing on sentiment for sterling.
In London trading as of 11:04 am, the GBP/USD was trading at $1.2999, up 0.6505%; the pair has ranged from a peak of $1.30004 to a low of $1.29068 in today's session. The EUR/GBP was lower at 0.8998 pence, a loss of 0.131% and off the session trough of 0.89977 pence; the session peak was recorded at 0.90234 pence.
Markets to Shift Focus to US Labor Data
While the presidential election in the US is driving sentiment for the greenback, market players will also be watching for the US labor data due, specifically the non-farms payroll report, which is due out on Friday. Prior to then, markets will focus on the ADP Employment Change figure for October; analysts' polls are forecasting that the numbers will show a drop to 650,000 from 749,000 in the previous month; if realized, that would be a significant drop in employment levels. On Friday, the NFP report is due out by the US Labor Department; analysts are predicting a decline in the data to 600,000 new private sector jobs, down from 661,000 in September. Average hourly earnings are also predicted to have dropped.