Sterling Holds for the Weekend

EURGBP Outlook: a Big Week Ahead For Euro Exchange Rates Against Pound

The pound is maintaining its gains ahead of the weekend, as it’s at 1.733 against the euro and 1.2919 vs the dollar at the time of writing. We’ll see the markets fixated on the outcome of the UK’s next General Election on 12th December. The Conservative Party has had a good week following the publication of the MRP poll we reported on yesterday, which forecasts a majority for Boris Johnson’s party.

How Much Do Markets Trust the Leaders?

The British pound dropped a little bit last week after the leadership debate between Boris Johnson and Jeremy Corbyn. Both came out of the debate relatively evenly. Since then, the leaders have come under heavy scrutiny in the media, with Johnson being criticised for the Conservative Party’s turning of a blind eye to Islamaphobia, and Jeremy Corbyn’s dire interview where he refused to apologise for the party’s many allegations of antisemitism.

Both Johnson and Corbyn will not take part in the BBC’s seven-way debate tonight, which features leaders of the other parties including the Liberal Democrats, the SNP, Plaid Cymru and others. They are however sending their replacements, with Chief Secretary to the Treaury Rishi Sunak standing in for Boris Johnson, and Shadow Business Secretary Rebecca Long-Bailey replacing Jeremy Corbyn. It will be an opportunity to see how warmly received other senior members of the Conservative Party and the Labour Party are in the spotlight.

What Happened to the Lib Dems?

The Liberal Democrats had a very slow start to their General Election campaign, with polls estimating they will make little to no gains on 12th December. Jo Swinson’s party aim to capitalise on remain voters, and differentiate themselves from the other two parties as they are fully dedicated to revoking Article 50 and staying in the EU.

Labour had feared that the Liberal Democrats would be their main competition. This resulted in their relatively neutral policy about Brexit, offering a second referendum but not definitively saying whether they would campaign for leave or remain.

This panic proved to be somewhat unwarranted. Swinson and her team have not been as popular as expected. Labour’s real danger are losses in its traditional northern heartlands which also happen to be leave voting.

With less than two weeks left until the General Election, the markets are watching eagerly for any campaign slip-up. For more information on what may influence your EUR/GBP transfer in the coming weeks, get in touch with me directly, Daniel Johnson at dcj@currencies.co.uk, or speak with a member of our team on +44 (0)1494 292 675.