This report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 for a number of currencies at the high compared to the low for the last 30 days.
|Currency Pair||% Change||Difference on £200,000|
Since the middle of May the Pound has been on a downward trend against the Euro, and it is no coincidence to me that this coincides with the narrowing of the Conservatives lead in the upcoming election next week. Since Labour have started to gain against the Conservatives, with the latter’s leads now at just 6 points, we have seen the Pound fall in value by as much as 3pc.
This morning we have seen the Pound fall again due to a YouGov poll published overnight that has suggested the race to number 10 is so close that there could be a hung Parliament. Today, compared with just two weeks ago, a sale of €200,000 would have result in a gain of more than £5,000 if timed effectively. This type of movement over such a short space of time goes to show just how important it is to have an experienced currency broker on your side who can assist you in the timing of your transfer.
Earlier this week Theresa May and Jeremy Corbyn were interviewed by Jeremy Paxman and grilled on their respective manifestos. The reaction shows that there was no clear winner, but there were no disasters for the Conservatives and GBP gained ever so slightly compared to the end of last week. These TV debates have the capacity to effect Sterling exchange rates as they give the parties an opportunity to bolster their campaign or potentially derail it. There are further debates and interviews scheduled for the remainder of this week and beginning of next week that could impact on Sterling and would therefore be worth keeping an eye on.
This evening for example there is a debate with the some of the key figures of the seven main parties. Then on Friday there is ‘Question Time’ with May and Corbyn which will be the last time the pair go head to head before the Election Day and could once again affect the latest polls. Even though the polls have proved deceptive in recent political events, it is rumour rather than fact that often dictates exchange rates, as we have seen this morning, which means they should still be watched closely. If Labour continue to make inroads in the polls then I would not be surprised to see GBP/EUR fall below 1.14 before the end of next week.
We are light on data releases from the UK for the rest of this week, but first thing this morning at 09:30 we have the latest Mortgage approval figures for April. Lenders have noticed a fall in applications in February and March, and there has been talk recently of a ‘cooling’ in the housing market. If figures show a drop once again then this could signal that there is a lack of consumer confidence and this could also weigh on Sterling strength.
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