The Pound still maintains the higher ground against most currencies after last week’s announcement of a snap general election which continues to be considered by the markets.
Politics once again continues to the main driving force for Sterling exchange rates with this early general election approaching and the issues surrounding Brexit and Scottish independence all thrown into the mix.
As always with any election nothing is certain and as the political party manifestos emerge the Pound is likely to react. Even with six weeks to go it is still early days in this election but the Pound could come under pressure as new developments unfold. As things stand a conservative majority is widely expected which would could see the conservative party increasing their majority which is currently 17 seats. This is being seen as positive as it will give Theresa May a bigger mandate to proceed with the Brexit as she has outlined.
With no UK economic data releases today the markets await Gross Domestic Product figures for the first quarter, released on Friday. Expectation is for GDP to dip to 0.4% on the quarter. This would mean there has been a slight softening in the economy which could see the Pound come under pressure, especially after the excellent gains seen last week. Buyers may wish to take the higher levels now to avoid potential disappointment.
The French election is important not just for the Euro but also Sterling exchange rates. The two candidates have very different policies and attitudes towards the European Union. Discussions are already focussing on which candidate would be better from the British perspective in terms of Brexit negotiations. Macron is expected to drive a hard bargain over Brexit and it has been reported that he would look to close the Le Touquet agreement where migrants currently face border checks in Calais, something that could be a political thorn in the coming months.
For more a more detailed outlook on the French election do read this morning’s Euro section.
For the latest news and economic trends that could impact Sterling exchange rates, call our team today on 01494 725 353 or email me here.
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