Pound drifts lower as election looms

30 March, 2015

Robin Haynes

Pound drifts lower as election looms The Pound fell against a basket of major currencies last week, as the UK election campaign got properly underway. Despite better than expected retail sales figures on Thursday giving sterling a mid-week boost, exchange rates for sending money abroad in most currencies closed the week below their position at the beginning.

CCY Open Close Change
EUR 1.3787 1.3668 -0.86%
USD 1.4983 1.4888 -0.63%

AUD 1.922 1.9215 -0.03%
CAD 1.8831 1.8761 -0.37%
CHF 1.4614 1.4312 -2.07%
NZD 1.9727 1.9694 -0.17%
THB 48.89 48.43 -0.94%
ZAR 18.0396 17.9172 -0.68%

(Indicative mid-market rates only)

Uncertainty caused by the likely election result with no clear majority for either the Conservatives or Labour, is now starting to be priced in for the Pound, and those of you with requirements to buy currency in the coming weeks may wish to consider a forward contract to eliminate the risk of any further downward movement for the Pound as polling day approaches in May.

This week we start with UK mortgage approvals and German inflation on the economic calendar today, but as the month draws to a close and with the Easter weekend approaching, the only other major UK data due out is the important GDP revision for the final quarter of 2014, announced tomorrow at 9.30am.

In the background, the tiff between Germany and Greece continues, with Greek premier Alexis Tsipras having put forward new reform plans to his country’s creditors on Friday night. Officials from the “Troika” of the EU, the IMF and the ECB were examining the proposals this weekend, with a response expected in the coming week. As we have been reporting in recent weeks since the Greek election, the Euro price is sensitive to the negotiations and any deal between the parties would be likely to make the Euro stronger (more expensive), while failure to reach agreement before Greece runs out of money next month, would be uncharted territory for the single currency bloc.

Elsewhere this week we have US unemployment (Friday) and Eurozone inflation (tomorrow) likely to move exchange rates in one direction or the other.

Finally please remember that Friday and Monday are bank holidays in the UK; if you have a payment you need to make before the Easter weekend please contact us early to ensure there is sufficient time to get your funds to their destination.