General Election controlling the rates…

31-05-2017

The Pound has declined against the Euro over the last week or so due to strong European Data. This coupled with the General election looming has kept the Pound down around 1.14 market level. Mario Draghi has side stepped any suggestion of quantitative easing being reduced in the short term and even this hasn’t slowed the Euro’s resurgence.

Indeed it seems that the Pound will continue to have a rough ride over the next few weeks if March’s economic date and continuing rising inflation is anything to go by. Rates currently held may be quite attractive when looking back in June. Those waiting for a sudden spike in the Pound to Euro value may have already missed the boat in the short term. With European data continuing to improve and the European Central Bank hinting at curtailing there current asset purchase program I feel the Euro currently has a more positive outlook than the Pound at least in the short term.

The truly tragic events in Manchester had little effect on the markets, this is sadly because of the frequency of these attacks the markets tend to be less reactive to them these days.

A recent YouGov pole are now suggests the conservatives may fail to obtain a majority and a hung parliament is likely to further dampen any strength in the pound. With just 8 days to go before the general election I think it is unlikely we will see any significant improvement in the pounds position.

If the Conservatives win the election with a majority in parliament I expect the Pound to rally back and present some very good euro buying levels directly after the election on June 8th. However a hung parliament or a labour victory (as this could throw current Brexit plans out the window) will do little to help the Pound sterling. As is much the case with currency market conditions the upcoming levels will be relying on politics once more rather than economic data. The upcoming TV debates are likely to highlight this fact and we may see a few wobbles as these are held.

For any questions on anything raised in this blog or help with any of your upcoming currency requirements please feel free to contact me at accounts@currencydeals4u.co.uk

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