Good news doesn’t last long on financial markets and the good sentiments towards the pound from last week have already worn off with the pound losing ground against its counterparts. Overall expectations for the pound have risen as Article 50 was triggered with gusto and markets believe the pound can rise much higher. There are however significant challenges ahead for the UK and the pound so whilst the worst fears have been put to bed, for now, continued deterioration in the UK economy and concerns over the impact of Brexit will surely see sterling lower.
A General Election, even one as one-sided as we are expecting in June is still a worrying time for business and financial markets. Business and consumers will often hold back on important economic decisions around the time of an election for fear of making the wrong move before a change in legislation and plans. The currency markets typically view a General Election as a negative event and history tell us the pound has weakened in the run-up to all the previous General Elections. If you are buying or selling the pound making some plans around this important event is crucial to getting the most for your transaction.
It is looking likely Theresa May will win and this will present some sterling strength. However often when the market is expecting one outcome on the market the opposite can easily occur. The market may well experience some volatility in the run-up to the election which clients looking to buy or sell the pound should be aware of. If you have a transaction to consider and wish to get an overview of the market and any associated costs then making some plans in advance is the best way forward. For more information on strategies to help maximise your exchange rate please speak to me Jonathan by emailing email@example.com including a brief description of your position and what you are looking to do.