This Pound Sterling update examines factors that could affect GBP exchange rates this week. With the UK election now upon us and only hours until we learn the outcome, there is the potential for significant exchange rate volatility.
The below table shows the market movements for a number of currency pairings in the last 30 days:
|Currency Pair||% Change||Difference on £200,000|
Recent momentum from the Labour party has made the 2017 election race a lot closer than we had at first thought. When Prime Minster May first announced the snap election two months ago we saw a spike in the markets, with the GBP/EUR rate jumping up to 1.19 and all thoughts turned to an automatic 5-year extension to Theresa May’s reign as PM. Since the snap election was called a number of events have led to a downturn for Sterling, and Jeremy Corbyn and his Labour party have certainly closed the gap if the opinion polls are to be believed. Either party need a minimum of 326 seats for an overall majority, if neither party manage to get an majority then we will have a hung Parliament.
With so much uncertainty in the air markets can become extremely volatile today. I imagine that as the exit polls start to come out the event could either be a non-runner or look to hit the “magic mark”. Either way do consider making sure you are in a position to act quickly and have been in contact with your account broker here. In times like this markets can move very quickly and it is important that if you have a requirement we are aware of this and able to assist you.
With many clients already looking to second guess which way the election result may turn, I would recommend setting a rate alert with us. This very simply means that once a rate of exchange hits the level you require we can get in touch with you and assist you with your future transfer, all we need to know is the level you want to transfer at and the best time of day to contact you.
We are now only a few weeks away from the Brexit negotiations starting, and depending on the election result this could get very shaky and quite uncertain. With the outcome of the election key to how these negotiations turn out, all eyes across Europe and the UK will be on what happens over the next 48 hours.
We have lots of data out on Friday as well as the election results, including Inflation expectations, manufacturing production figures and trade balance releases. These may not have as much of an impact as usual due to the election but they are still worth keeping an eye on.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me directly at firstname.lastname@example.org.