Labour parties unseats Conservatives for the first time in 14 years
On 4 July 2024, the UK election resulted in a landslide victory for the Labour Party, securing a majority in Parliament. This outcome marked a significant shift in the political landscape, with Labour now set to implement its agenda, which includes ambitious plans for healthcare reform, increased social spending, and climate action.
The financial markets initially responded with caution due to uncertainty surrounding Labour’s economic policies, but the pound has followed other currencies stronger in the morning trade as the dollar trades softer across the board. However, as Labour outlines its fiscal strategy and economic policies in more detail, market reactions are expected to stabilise, with potential adjustments in sectors such as healthcare, renewable energy, and infrastructure likely to be key areas of focus.
Dollar softer ahead of payroll data
The Dollar index has retreated towards the 105.00 level, having traded near 106.00 earlier this week. The shift in sentiment may be attributed to caution ahead of this afternoon’s US payroll data, following disappointing Manufacturing and Private payroll figures earlier in the week.
Market expectations include unemployment holding steady at 4%, with average hourly earnings anticipated to fall below 4%.
The Rand has gained from the weaker dollar after a volatile week of trading. Opening this morning below R18.30, the Rand is expected to closely follow the dollar as attention shifts away from government and cabinet news headlines.