The pound to Euro exchange rate has rallied higher breaking over 1.17 for the GBP vs EUR pair. Those who are looking to buy Euros with pounds are seeing the best opportunity to do so for 6 months presenting a good buy opportunity. Focus in the UK remains on the UK general election to held 12th December where high volatility is to be expected. The polls currently have the Conservative Party in the lead followed closely by Labour but how that turns into seats on the day remains to be seen. The markets perceive a solid Conservative majority as welcome news for the pound as Brexit would be delivered and importantly with a deal. That’s not to say there won’t be some major hurdles ahead in terms of negotiating a trade deal but the economic outlook is perceived by the markets as stronger with a Conservative government.
Those with pending requirements would be wise to plan around this major event to take advantage of any market movements. Some commentators including Peter Kinsella, Global head of FX Strategy at UBP have suggested that sterling will rise substantially if the result of the next general election is a conservative majority. Such an outcome could result in a good jump higher for the GBP/EUR pair. Those looking to sell Euros are currently feeling the squeeze with a stronger pound although as those polls start changing in the weeks ahead there could be movement for the pair.
After 3 ½ years of Brexit debate it remains to be seen whether Brexit is to be the overriding element in this election campaign which makes the outcome very difficult to predict.
EU CPI Inflation Data released this morning
Data for the UK and EU is light today as we end the week after a busy week for UK economic data. EU Consumer Price Index inflation data is released this morning although no change is expected from the initial reading. EU inflation remains well below the European Central Banks target rate and continues to prove problematic for the policy makers at the central bank. With a new President at the ECB after Mario Draghi’s departure it is expected that more loose policy will be applied to try and stimulate economic growth in the bloc and to try and fend off recessionary fears.
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