The election saga is dragging on but the Pound is managing to maintain a comfortable stability, and due to Government formation, greater stability should lend itself to further improvements on buying Euro and Dollar rates.
The picture doesn’t look quite as positive for Euro buyers initially, as the single currency is set to be the first beneficiary from political developments next week. Today is polling day for local elections in France, and the new party constructed by the new President is set to gain a landslide in Parliament.
Much like the previous expectation of a Conservative majority being beneficial for the Pound, we have already been given hints at how positive such a result could be for Euro. Macron is proposing sweeping Labour reforms and pro-business policies – having a majority in Parliament is the first step towards achieving this.
However, this is arguably priced in already given recent polls, so anyone looking to sell Euros shouldn’t be expecting a strong improvement.
The key developments next week for Euro and Dollar buyers will be coming from the UK.
There was a delay last week in the announcement of the working partnership between the Conservatives and the DUP. The details and confirmation of the relationship should emerge, and depending on how well their proposals are received in Parliament, and whether the course of Brexit is altered or not, will determine how the Pound behaves.
Given the positive movements for the Pound last week when Theresa May and the DUP were on the verge of announcing their partnership, however, it seems more likely that the question is one of how much the Pound will gain against the Euro, Dollar and Australian Dollar.
Euro sellers may be wise to seize any opportunities created by the French election result tomorrow. Conversely anyone with a GBP/EUR, GBP/USD, or GBP/AUD requirement should be monitoring political developments next week in order to give yourself the best opportunity to puchase at any peaks which emerge rather than a trough.
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