Outlook for of GBPEUR rate ahead of UK Elections – Reason for Exchange Rate Stability
The GBPEUR exchange rate is monitored very closely for any affects due to the December elections in United Kingdom. Interestingly, the relationship of sterling is soundly evidenced and well documented. The GBPEUR rates does tend to fluctuate since the Brexit vote and EU Referendum became an issue for the markets at large.
Sterling Stable with Anticipation of a Conservative Victory
Sterling has continued to climb in recent weeks and more so when probability of a deal with EU became more likely than before. At the moment, the sterling to euro interbank rates stand at 1.1625 as we write this. It is now 9% above its previous low of 1.0647 on 10th August, 2019.
Sterling could find itself in a volatile mood with the election in tow, which affects the outcome of much-awaited Brexit. Interestingly, the pound was remarkably calm when the elections were called, and the Conservative Party’s lead in the polls further relaxed the fear about outcomes. Unless any news says otherwise, the sterling will remain relatively calm.
The famous Financial Times ‘Polls of Polls’ takes into consideration the average across the leading polls. According to it, it has been observed that Labour Party stands with 27% while the Conservative Party leads the polls with 38%. It is one of the vital metrics to evaluate the outcomes of these elections and markets do take them in consideration before making any estimations.
Pound and Euro Forecasts
It could be debated that sterling’s loss in value has been muted due to less likely roads that could lead to a prospect of a no-deal. In the case of a win by the Conservative Party, a no-deal could result due to breakdown in talks with the EU party. On the other hand, a second referendum could be on the card if Labour Party or the coalition between Liberals and Scottish National Party (SNP) does happen. This would go in favour of a revised deal or Remain option.
Rest assured, the pound to euro rate could still be uncertain ahead. The exchange rate will be dictated by the December elections, which will be crucial to understand the way forward for UK. It remains to be seen how Brexit shapes the GBPEUR exchange rate and euro at the same time.
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