The Pound has rallied during Monday’s trading, bringing some much needed respite to those clients holding Sterling.
After watching the currency’s value decline for the past couple of weeks, many clients have been questioning how much further it would fall ahead of this week’s general election.
Poignantly, it is this week’s key vote which is shaping Sterling’s value of late, with the recent polls indicating a surge in support for Labour. The markets had clearly factored in a Conservative majority victory but since reports of a 20-point lead last month, each subsequent poll has indicated a decreasing advantage. This in turn has caused investors to panic, with the result being a sell-off of large Sterling positions and a downturn in the Pound’s value.
I’m extremely wary about pre-election polls, especially after last year’s UK referendum and US election results. However, with strong indications that a hung parliament is now a very real possibility, are you prepared to gamble on the result if you have a short-term Sterling currency exchange to mate?
Personally, I feel that the Pound is fighting an on-going uphill battle and any short-term improvements should be protected wherever feasible. Even a strong Conservative victory will only boost the Pound back to the levels we saw a couple of weeks ago, which have already proved unsustainable over recent months.
Looking beyond Thursdays vote and the UK economy still has many issues to content with. The Brexit negotiations have not even started and seemed to have hit a wall, whilst UK growth forecasts for next year and beyond have shrunk.
I still feel based on current market conditions that the downside risk outweighs the current upside gains and for this reason I would be removing as much risk as possible from the current market.
If you have an upcoming Sterling currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on email@example.com.