The pound to Euro exchange rate has dipped lower this morning following the televised TV debate between Jeremy Corbyn and Boris Johnson. A snap YouGov poll after the debate found that 51% of viewers found that Johnson performed better than Corbyn. YouGov added that it is so close as to be within the margin of error. It is important as YouGov is regarded as the most accurate of polls and was in tune with changes in voting habits in the 2017 election when Theresa May lost her majority. The pound had reached a 6 month high vs the Euro on Monday presenting a good opportunity to buy Euros. Rates have since drifted marginally lower although rates remain close to the recent peak.
How a Hung Parliament Could Effect GBP/EUR
The UK election to be held 12th December remains the main focal point for sterling exchange rates and high volatility is to be expected in the coming weeks. What is unclear is whether there will be a Conservative majority or a hung parliament. Whilst a conservative majority would break the deadlock in the British parliament after three and half years, a hung parliament could create considerable uncertainty for GBP vs EUR. Those looking to buy or sell Euros would be wise to get in touch and consider planning around this major event. Remember this is the first December general election for 100 years and the stakes are high. There could be a material shift in the price of sterling to Euro on the morning of 13th December when the election result is in.
First speech for ECB’s Lagarde
On Friday Christine Lagarde the new President of the European Central Bank will make her first speech which could create some volatility for Euro exchange rates. Having not expressed any views to date it will be interesting to see what she offers in the way of future monetary policy. Her predecessor restarted the asset purchasing scheme before departing the central bank and there is an expectation that she will need to continue with this policy.
The Euro did receive a small boost after EU construction data rose to 0.7% in September from -0.8% in August. This is the first increase in 3 months and gives some optimism for the EU economy. However whilst France and Hungary were seen as performing well the likes of Sweden and Spain performed weaker than the rest.
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