This Pound Sterling report discusses the factors that could affect GBP exchange rates this week, looking ahead to the UK general election. The table below shows the difference you would have received when buying £200,000 at the high compared to the low in the last month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR4%€9,620
GBP/USD1.7%$4,600
GBP/CAD3%CAD $10,580

To keep track of rates you can visit our live foreign exchange rates page.

UK on high alert but how will the currency markets react?

The Pound has struggled to gain much momentum of late, despite an upturn earlier this week. Sterling did gain some traction during Monday’s trading following a weekend in which its market value dipped, as the tragic events of Saturday night unfolded in the capital.

Whilst Saturday’s terror attack may not have been as detrimental to Sterling’s value as previous attacks, the shockwaves that were sent across the globe resonated with everyone. The stock markets were hit and investor confidence will have been negatively affected, as the UK comes to terms with yet another attack on our society, economy and most importantly way of life.

Unfortunately, terror attacks have become a far to regular occurrence and as long as they continue to happen, I expect the markets to react negatively to the economy in question.

UK general election takes centre stage – what effect will the outcome have on the Pound’s value?

After watching the Pound's value decline for the past couple of weeks, many clients have been questioning how much further it could fall ahead of tomorrow’s general election.

Poignantly, it is tomorrow’s key vote which has been shaping Sterling’s value, with the recent polls indicating a surge in support for the Labour party. The markets had clearly factored in a Conservative majority victory but since reports of a 20-point lead last month, each subsequent poll has indicated a decreasing advantage. This in turn has caused investors to panic, with the result being a sell-off of large Sterling positions and a downturn in the Pound’s value.

I’m extremely wary about pre-election polls, especially after last year’s UK referendum and US election results. However, with strong indications that a hung parliament is now a very real possibility, are you prepared to gamble on the result if you have a short-term Sterling currency exchange to make?

Personally, I feel that the Pound is fighting an on-going up-hill battle and any short-term improvements should be protected wherever feasible. Even a strong Conservative victory may only boost the Pound back to the levels we saw a couple of weeks ago, which have already proved unsustainable over recent months.

Looking beyond Thursday's vote and the UK economy still has many issues to contend with. The Brexit negotiations have not even started, yet have seemingly hit a wall already, whilst UK growth forecasts for next year and beyond have shrunk.

I still feel based on current market conditions that the downside risk outweighs the current upside gains and for this reason I would be removing as much risk as possible from the current market.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me at mtv@currencies.co.uk.

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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.