The pound to euro interbank exchange rate stands at 1.1763 today. This is very close to its highest in 31 months, or since May 14th 2017, reached yesterday at 1.1764.
Sterling stands near this 31-month high versus the Eurozone’s common currency, because an anticipated poll by YouGov yesterday suggests that the Conservative Party will win a majority of MPs, at the December 12th UK general election.
It’s thought that, if a single political party wins next month’s election, it may unblock Brexit, and increase the UK’s economic growth.
However, besides YouGov’s poll, surveys elsewhere this week indicate that the gap between the Tories and opposition Labour party is shrinking. This may affect the exchange rate, in the fortnight that remains until polling day.
YouGov’s MRP Poll Points to 68-Seat Majority for Tories, Lifting the Pound
Sterling has risen today, because according to YouGov’s anticipated MRP poll, the Tories stand to win a majority of 68 seats at next month’s vote.
In particular, the Tories might win 359 seats, ahead of closest rival Labour’s 211 seats. In these circumstances, a majority UK government would be formed, and Prime Minister Boris Johnson could pass laws, without depending on other parties.
It’s thought that this may accelerate the conclusion of Brexit, enable the UK to begin negotiating its future trade deal with the EU, and let the government work on the UK’s domestic priorities. In turn, this may accelerate the UK’s GDP (Gross Domestic Product) growth in 2020, and has strengthened the pound.
Savanta ComRes Poll Suggests Tory Lead Shrinking, Follows ICM, Kantar Surveys
However, looking elsewhere, a new Savanta ComRes poll yesterday shows that the Conservatives’ lead over Labour has shrunk to just 7%. This follows ICM and Kantar polls earlier this week that similarly suggest that the gap between the UK’s two biggest political parties is diminishing.
It’s thought that, if the Tories’ lead over Labour is under 10%, this raises the possibility of a ‘hung’ Parliament, in which no single party wins a majority of MPs. In this case, the world’s money managers are concerned that the Brexit deadlock may continue, thereby weighing on the UK’s economic growth too.
So, in the fortnight that remains until Brits go to the ballot boxes, these opinion polls may continue to affect the value of sterling.
If you would like to learn more about what may affect the GBP/EUR or have an upcoming currency transfer, feel free to contact me, Tom Holian, using the form below.