Sterling exchange rates have been falling now for nearly 3 weeks consistently against both the euro and the US dollar. This is one of its longest stretches of continual daily losses seen for over a year. There are several reasons for the fall from grace for the pound where the interbank rate was at nearly a year high against the US dollar, and a a two year high against the euro at the beginning of the month. Political uncertainty about the UK's future has probably been one of the largest drivers for its loss in value over recent weeks and I don’t expect this to change.

Currency Pair% Change (Month)Difference on £200,000
GBPEUR3.4%€8,000
GBPUSD3.6%$9,500
GBPCHF4.2%CHF 11,500

European elections could be negative for the Pound

Generally, over the last 2 years the popularity for the mainstream political parties have swung wildly. This was seen again only recently with the local elections when the Conservative Party lost over 1,300 councillors as the elective remained frustrated with the progress of Brexit.

The European elections take place on Thursday and more of the same is expected with changing loyalties of leading MP's plus a number flocking to the new and rising Brexit Party. The results from the European elections this week are expected to be fairly mixed, but many expect more losses for the Conservative Party. There are also concerns that the other parties could use any ‘win’ as a spring board towards a general election. In either case the result of the European elections has the potential to drive sterling's value over the coming days.

Brexit vote called for June

Brexit vote called for June

PM Theresa May has announced that she plans to ask parliament to ratify her Brexit deal which is taking place for the fourth time early next month. Mrs May has suggested that she will resign when the deal passes, however has now confirmed that after the vote she will give confirmation of the timelines of her resignation. Generally, the view seems to be that this vote will fail resulting in her resignation and the Conservative Party trying to find a new leader of the Party, and Government, before the summer recess in July. Boris Johnson announced his plans to run for the post but Michael Gove, Dominic Raab and Jeremy Hunt are all front-runners according to bookmakers’ odds.

This announcement by the PM resulted in Cross-Party Brexit talks breaking down. Only today she has released further reassurances about environmental and cross boarder jobs in an effort to strengthen her chances at this vote. This all results in the next 3 weeks of politics being critical for the UK, its economy, Brexit and the pound.

Jobless figure over looked by the market

Last week we saw UK unemployment data released, which dropped to 3.8% in March, the lowest since 1974.  The economy added 99,000 jobs which would have traditionally been positive for the pound however it was overshadowed by politics and the pound still fell on the day. Tomorrow, UK Consumer data is released which is expected to show an increase but could again be overlooked. The UK ends the week with UK Retail figures which are released on Friday and expected to show a contraction in activity. Another story to potentially watch is that of UK Steel which has suggested only this morning that it is ‘days away from falling into administration.’

News

Read more articles

 

Download our monthly currency forecast

Download here

 

Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.