The Pound's rally against the Euro was put to an end following the Bank of England's Super Thursday. The big question now is, Will Macron win enough support in the National Assembly?. The below table provides Pound to Euro exchange rate movements for the last 3 months.
|Currency Pair||% Change||Difference on £200,000|
I’m sure Euro buyers were left with a sour taste yesterday as poor economic releases from the UK quickly reversed sterling’s steady gains throughout the week. GBP EUR rates dropped by as much as 0.6% over the course of the afternoon making a 250,000€ transfer over 1,200 £ more expensive .Positive retail figures released out of the euro Power house Germany will have further compounded Sterling’s woes. This morning may well continue to present a number of opportunities for euro sellers with a long list of economic data due to be released, notably Germany’s latest GDP figures.
With forecasts projecting a rise up to 1.7% from 1.2% it may be worth getting in touch with your account manager here who can help you capitalize on any short term spike as and when they present themselves.
Naturally with Macron being convincingly voted in as President a lot of the uncertainty surrounding the Euro zone and indeed the Euro has tamed significantly. However, with the country so perfectly divided in the first round of voting, many are questioning the support the youngest ever French president will carry into the parliamentary elections. Investors took great support in his victory as his program centres around re instating the European dream, but if Macron doesn’t draw enough support to follow through on his promises, the markets may mark the Euro as a riskier prospect once more.
Macron’s main opponents were the leaders from the Front national who’s key plan was to abolish the Euro and reinstate the Franc.
Following their heavy defeat on Sunday, there have been whispers that Marine Le Pen would re consider her drive against the Euro in a bid to attract more supporters to the party. Given that ¾ of French voters are in favour of keeping the Euro according to recent polls, the plan may have some substance. However, this caused big disruptions in the camp with FN vice president Florian Philippot declaring he would step down should Le Penn put the Front Nationals convictions into question.
I wouldn’t be surprised to see Macron gain support on the back of this and if similar stories were to arise in the coming weeks we could see sustained Euro strength as a result. Lloyd’s bank recently dropped their GBP/EUR forecast to 1.16 for the end of 2017. With outbreaks like this, it is hard to argue with them.
For more news or events that could impact Euro exchange rates, call us on 01494 725 353 and one of our experienced brokers will be happy to answer any of your questions. Alternatively, you can email me directly at email@example.com.
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