General Election causes Pound to fall against the Euro (Tom Holian)

EUR GBP Moves Higher Ahead of UK GDP Update

Sterling vs the Euro has crashed as the election result caused a big shock for the foreign exchange markets. The fall happened immediately after the release of the first exit polls on Thursday night which showed that a hung parliament would be likely with the Tories not being able to form a majority government.

Even when I saw the release of the initial poll owing to what happened during 2016 when the polls were completely wrong in predicting both the Brexit vote as well as the Trump victory I didn’t have too much faith in them being correct.

However, on this occasion the results were almost spot on and we saw the Pound drop into the 1.12 region at one point on Friday morning.

The Tories failed to achieve a majority government and this led to a fall in value of Sterling vs the Euro and at the time of writing the Tories are looking to sort out an agreement with the DUP.

The Pound managed to put a stop to its losses by midday on Friday and with calls for Theresa May to resign this could have caused further uncertainty for Sterling so as she has stayed this helped the Pound to resist falling further vs the single currency.

The next stumbling block for the Pound will come in just over a week’s time with the German Chancellor Angela Merkel suggesting that there is now no reason to delay the Brexit talks.

As we now know who will be leading the country the talks are due to start on June 19th and as we have already seen in the last few months the European leaders are likely to make the talks as difficult as possible in order to discourage other countries from doing the same.

Therefore, I think the Pound could be under further pressure this month vs all major currencies including the Euro.

If you’re in the process of buying a house in Europe it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

To find out more or for a free quote when buying or selling Euros compared to using your bank then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian [email protected]