Politics is still the name of the game in governing Pound to Euro and Pound to US Dollar exchange rates, with some of the massive gains which exploded on Tuesday being nibbled into heading into the weekend.
So why the dip?
This weekend is the first full weekend of campaigning in the UK for the General Election on June 8th. The likely explanation for the very late afternoon dip on the Pound across the board on Friday was due to nervous traders not leaving the content of what was said this weekend up to chance.
Key features of manifestos would be alluded to, with Corbyn already coming out swinging with four additional bank holidays to be added to the calendar should Labour come to power. So the likelihood of polls shifting after this weekend will be high, with Pound to Euro and Pound to Dollar rates adjusting parralel to changing voter habits.
If you have been reading this website regulalry since the announcement of the General Election you would already know why currency markets are favouring a Conservative victory. It is little to do with markets preferring Conservatives over Labour, but much more to do with an appreciation of how this election will effect the Brexit talks.
Even a brief overview of market commentary points to a few key factors which would improve the UK’s negotiating position with a majority Conservative victory. For one an elected Prime Minister will be respresenting the British interest at the talks. Furthermore, an election now means no potential for a messy change in Leadership mid-talks in a few years time, giving continuation and a stronger front.
So any change in the polls showing Labour eating into the mammoth 24 point lead for the Conservatives on the polls would theoretically undermine the Pound’s value, which is why the Pound was already losing value heading into the weekend. Investors did not want to be holding onto Sterling should this end up being the case.
This election will continue to produce twists and turns, and in the immediate short-term we also have the French election to contend with. So Pound to Euro exchange rates will have some of the largest ramifications, depending on which candidates enter the second round.
In such a politically fluid landscape, a premium is put on being a well-informed purchaser, and being able to move quickly to avoid being ‘last to the party’ should any opportunities emerge, or to avoid being ‘caught out’ should rates deteriorate whilst you are busy at work during the day.
As a currency broker my role is to do just that for my clients, ensuring you navigate the choppy waters of election season with as little exposure as possible, with the aim of securing the most competitive exchange rates during this period, for any Pound to Euro, Pound to US Dollar or Pound to Australian Dollar purchase.
If you are planning to make a currency exchange involving the Pound and a foreign currency, it’s well worth your time getting in contact with me on firstname.lastname@example.org in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.