The Pound has reached 2017 highs against a raft of major currency pairs over the past couple of days, with yesterday being the Pound’s biggest one day gain (across a basket of major currency pairs) since March of last year.
The reason behind the boost to Sterling’s value can be put down to UK Prime Minister, Theresa May’s plans to hold an election on the 8th of June. Her reasoning behind this decision (and her change of heart) is to create some unity within parliament as she claims the Country us coming together but Westminster us not.
Her conservative party is leading the polls at the moment and its looking like a straight forward win for them which will then allow the government to carry out its Brexit plans without too many hurdles along the way, and this has left the Pound trading at 2017 highs.
Many will have already taken advantage of the improved rates currently available, and for those holding on to see where the Pound goes next I think the upcoming French election and issues surrounding geopolitical events unfold will determine where the Pound goes next.
Increased global tensions could result in US Dollar strength as the currency is considered a safe haven and therefore investors prefer to hold funds in this currency in times of market uncertainty.
A weak performance from far-right French Presidential candidate Marine Le Pen would likely result in Euro strength, and I think the outcome of this election on the 23rd of this month will determine whether the Pound can consolidate above the 1.20 mark.
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