So, on Sunday evening Parliament dissolved and the election race began for the U.K which I have no doubt will have a great impact on Sterling exchange rates in the coming weeks.
In fact in 2010 we saw a great deal of weakness for the Pound in the lead up to the election and then a little strength following it when the uncertainty had been removed. I remember the trading floor being particularly busy before, during and after the election and I expect this year to be no different.
Political uncertainty can be rather damaging for a currency and not only when we get a result but also depending on the result the uncertainty will cast a grey cloud over the Pound which will make it hard to gain too much strength until we have a firm and satisfactory resolution for who is going to run the country.
My view is that the media will yet again hype up the polls to be exceedingly close in the build-up and we may see similar to what we saw in the lead up to the Scottish referendum where the Pound lost almost 4% just before it.
If you have foreign currency to purchase in the coming weeks it may be prudent to protect yourself against market movement for this very reason as a 4% movement can end up with you paying over £7000 more for a €150,000 so is it really worth the risk of holding on?
We have various contract types available to protect you against market movement’s, you can see these by clicking here or calling 01494 725353 and asking to speak with one of our knowledgeable traders.
With the election pending in the U.K, lots and lots of problems still hovering over the Eurozone and the antipodean countries still seemingly trying to weaken off their currencies the main currency of choice at present appears to be the Dollar.
I think had the Federal Reserve not been slowing the hype of an interest rate hike over in the States we may have been looking at even move Dollar strength than we have seen of late.
Personally I still feel economic data will be the key to any real further Dollar strength and we have quite a lot of data out this morning and tomorrow from the States with Consumer Confidence this afternoon, mortgage, employment and manufacturing data out later tomorrow afternoon.
Further positive news and we may start to see the Dollar head closer to new multi-year highs to sell Dollars and a move down to 1.45 would not be out of the question.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here
With such a lot of data due out in the coming week it is imperative that if you are due to carry out an important currency exchange that you keep in close contact with us here and let your account manager know exactly what you are looking to do and during which timescale.
This morning we have key growth figures for the U.K however this is only a revision and no change to the 0.5% already out is expected to wrap up 2014. A little later at 10:00am we have key inflation figures for the Eurozone which is been extremely important for the Euros as the risk of falling into deflation becomes increasingly likely. At 11am we will also have the unemployment rate for the Eurozone.
Tomorrow morning to start the month off we see manufacturing figures from Europe throughout the course of the morning so for those looking to exchange Euros this week before the Easter break there could be some great opportunities that arise throughout the next day or so.
Anyone looking to buy or sell Australian Dollars in the coming weeks will be keen to see the result of the coming RBA interest rate decision. This could well pave the path for where the Australian Dollar may head in the coming weeks and personally I am still fully of the opinion that the rate will be up over 2 in the coming weeks.
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