Spanish elections and the impact on the pound vs the euro

GBPEUR Supported by Boris Johnson Reopening Update

The Spanish elections are due to be held on Sunday which will be the third general election held in just four years after Spain has endured one of its most uncertain political periods in history.

According to the latest polls there is still a huge amount of voters who have yet to decide which party to vote for so with just two days to go we could see a lot of volatility on GBP/EUR exchange rates once the voting finishes so I fully expect to see a lot of movement on rates on Monday morning.

This election will be the first one since the referendum was held and the problems caused during that time caused issues for the euro. Spain ended up sacking the government in Catalonia and many politicians fled the region in fear of reprisal.

The current Prime Minister Pedro Sanchez has only been in power for a limited time and he called the election only in February after his budget was rejected in parliament earlier in the year.

The current coalition appears to be failing as the Spanish Socialist Workers’ Party led by Sanchez has needed the support from other parties to pass legislation but owing to the difference in opinions he has struggled to get many of his policies through during his tenure.

With a total of 350 seats in parliament to be won it is highly unlikely that any party will be able to form a majority and at the moment the likely candidate to win is the current Prime Minister Sanchez but he will more than likely have to form another coalition which appears to be the new norm for a number of different countries across Europe.

I think the impact of the Spanish election could cause the euro to weaken over the weekend and I think we could see the pound make some gains during the early part of this week so make sure you’re well prepared for some volatility.

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