Historically a snap election has caused the currency in question to weaken, however on this occasion we saw the opposite occur. It seems Theresa May’s call for the election on 8th June was a shrewd move, with the conservatives so far ahead in the polls it could be a land slide victory. A conservative government is seen as positive for the UK economy and investor confidence grew as a result as did the value of the pound.
I would not expect a huge movement if the conservatives win, I am of the opinion it is already factored into current rates.
Following the first round of voting, we now have only two candidates with the possibility of victory, The final vote takes place on Sunday. Macron is currently clear favourite against Le Pen and following his performance at Wednesday’s debate we have seen the euro strengthen. Le Pen is a huge threat to the Euro, she has stated her willingness to ditch the euro and exit the EU. If she were to gain power I would expect the euro to plummet in value.
I am of the opinion a Macron victory is already factored into current rates, so I would not expect significant euro strength if he wins the election.
UK Trade Negotiations
Trade negotiations will be crucial to the value of the pound, if you have a euro requirement I would keep a close eye on developments. Despite what I think will be initial teething trouble I think trade deals will be thrashed out. It is in everyone’s self interest to keep trade flowing, playing on hardball in negotiations will not benefit anyone. If you would like my views on where I think GBP/EUR is headed please feel free to get in touch.
If you would like my assistance with your currency requirements feel free to get in touch. I will provide an individual trading strategy and I am also prepared to carry out a comparison against any competitor and I am confident I can demonstrate a significant saving, well worth two minutes of your time.