The pound to euro interbank exchange rate stands at 1.1667 today at the time of writing. This is 0.46% below sterling’s 29-week high versus the euro, its strongest since May 6th, reached yesterday, at 1.1721.
GBP has edged lower versus the EUR on the interbank market today, because two opinion polls have showed that the Conservative Party’s lead is narrowing, ahead of the UK’s general election on December 12th.
The financial markets are concerned that this raises the probability that there’ll be a ‘hung’ Parliament, in which no single party wins a majority of MPs, extending the UK’s Brexit deadlock.
However, it’s useful to note that sterling still stands near its 29-week high versus the euro. This reflects the fact that investors continue to factor in a relatively high chance of a decisive result next month.
Pound to Euro Rate Weakens, as Kantar, ICM Polls Show Conservatives Lower
According to polling company Kantar’s latest survey today, the Tories now stand at 43% (-2% below the previous poll), Labour 32% (+5), the Liberal Democrats 14% (-2%), and the Brexit Party at 3% (+1%).
This tells us that the Conservatives’ lead has fallen from 18% to 11% in a week, suggesting that Labour’s election manifesto launch has increased its support.
Similarly, ICM’s newest poll indicates that the Tories now enjoy just a 7% lead. Importantly, this is below the 10% lead traditionally needed to win a majority of MPs in the House of Commons.
This is prompting the world’s money managers to factor in a growing possibility of a ‘hung’ Parliament, thereby weakening the sterling vs euro interbank rate today.
Opinion Poll Shifts, Eurozone Inflation May Affect GBP/EUR
Turning to later this week, the pound’s value versus the euro on the interbank market may continue to be affected, by the shifting opinion polls, ahead of next month’s election.
In particular, if more polls suggest a shift between the Tories and Labour, raising the risk of a ‘hung’ Parliament and further Brexit deadlock, this may affect sterling against the common currency.
Meanwhile, the Eurozone’s preliminary inflation figures for November are released this Friday, at 10.00 GMT. These are forecast to show that Eurozone price pressures rose by 0.2%, to 0.9%.A result above or below this estimate could impact the value of the euro.
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.