This year's General Election could be one of the most important in generations. Current polls suggest the Conservatives will win a landslide which will give Theresa May more bargaining power in the Brexit negotiations. The below table provides exchange rate movements for a number of currency pairs.

Currency Pair% ChangeDifference on £200,000
GBP/EUR2.63%€6,150
GBP/USD4.95%$12,250
GBP/AUD6.99%$23,000

The most important election in our lifetime

Continually iterated by Prime Minister Theresa May as “the most important election in our lifetime” the next general election is now less than a month away. Yesterday continued to give positive signs for Theresa May and the Conservative party as votes for the local elections held on 4th May were confirmed in Scotland. The Scottish Conservatives replicated the strong gains already made in England and Wales, winning 276 seats in Scotland and increasing their share of the votes by 12 percentage points to 25%.

The SNP (Scottish National Party) won 431 seats and remained unchanged in terms of vote share from the last general election, at 32.3%, just 7.3 percentage points in front of the Scottish Conservatives.

How could this affect GBP rates medium term?

I believe GBP paired levels in today's market depends heavily on the future expectation of bargaining power Theresa May will hold when Brexit negotiations commence. Stronger backing in parliament will allow Theresa May to deliver the best possible agreement for UK PLC. Whilst a Conservative win is almost fully priced in at the next general election it will be the extent to which the party can capitalise on the current Labour weakness that will determine GBP rates in the medium term.

Short term influences for the currency market

Thursday this week sees a host of economic data and reports released for the UK economy. The day begins with manufacturing production at 9:30am. This release has had a bad run of late, posting two consecutive declines previously. Therefore, any further revisions down from the consensus of -0.2% could spell bad news for those with a GBP selling requirement.

At 12:00pm the latest Bank of England (BOE) interest rate decision is announced alongside asset purchase program figures and monetary policy summary. Whilst no change is expected, indications of possible movement in policy could lead to a short-term spike for those with a GBP requirement as the news is priced into the currency market.

Finally, NEISR (National Economic Institute of Social Research) GDP (Gross Domestic Product) estimate released at 1:00pm and will give an insight into GDP for Q2.

It's a busy week for the Pound and clients looking to trade may be prudent to get in touch with their broker sooner rather than later. If you are yet to trade with us, sign up here and one of our brokers will get in touch to talk you through the next steps.

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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.