GBP/EUR – Pound to Euro exchange rate forecast
French Election impact on GBP/EUR
Macron is now clear favourite following the first round of the French presidential election. Marine Le Pen, is a huge threat to the Euro with plans to ditch the single currency altogether. She has also stated her intention to hold a referendum in a bid to leave the EU. If she was to gain power expect the Euro to plummet in value.
The market moves on rumour as well as fact and I am of the opinion that a Macron victory is already factored into current GBP/EUR buoyancy levels, I think that if Macron does gain power there would be a slight improvement in Euro value, but nothing significant.
UK Election effect on the Pound
I think the UK election will be a very similar scenario to the French election. Theresa May has pulled a very shrewd move by calling an election while competition is so weak, a move Sun Tzu would be proud of. Usually, a snap election would cause the currency in question to weaken, but on this occasion Sterling strengthened upon the announcement due to the conservatives being so far in front in the polls. This is seen as a positive for the UK economy which caused an increase in investor confidence. I think if Theresa May gains power I would expect a small movement in Sterling favour, but nothing significant.
Is 1.20 a resistance point?
We have seen GBP/EUR get very close to 1.20 in the last six months only for the market to readjust, last week it hit 1.1994. If you have a Euro requirement short to medium term it is important to keep this in mind rather than having too optimistic a target.
GBP/AUD – Pound to Australian Dollar rate forecast
GBP/AUD 7 month high
It is looking tempting for Australian Dollar buyers as present. We are witnessing a seven month high. I think there is potential for further gains for Sterling however due to the housing bubble down under and Australia’s heavy reliance on the Chinese. Data from china has been poor of late and has contributed to a weakening Aussie. Your time scale will be crucial in timing your trade.
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Feel free to take a look at our UK election guide here.