Best exchange rates since 2017
11 December, 2019
Sterling exchanges rates have benefitted hugely this last week as markets continue to price in the most likely election outcome of a Conservative majority. GBP/EUR peaked on Monday at the best buying levels seen since May 2017, and similarly against the USD with highest rates since April during yesterday’s trading. The polls however have shown a gradual closing of the lead over Labour, and as such the prospect of a hung parliament is still on the minds of many traders. With the markets having heavily priced a Tory victory, the pound could suffer quick and heavy losses if this outcome does not materialise, meaning for many people the risk to reward ratio of gambling over the election is starting to favour taking action before the result given the current exchange rates available.
This election is set to be one of the most unpredictable, and pivotal moments in recent history. So many voters are still undecided due to the Brexit backdrop of this election, even more people are voting tactically for the first time, and over 3 million new registrations have come in just in the last couple of weeks. Will the bad weather setting in this week also have an impact in some areas of the country? One thing for sure is that the result could still swing either way overnight on Thursday.
Last night at 10pm we got the final MRP Poll which is the largest and most detailed poll produced for the election. The first poll 2 weeks ago predicted a Conservative victory by 68 seats over Labour, however last night’s poll indicated that this majority is now closer to 28, with a margin of error that could see as few as 311 seats for the Tories. Anything below 326 would see a hung parliament and expected sell off of Sterling with renewed uncertainty.
With so much focus on political events and Brexit, it is sometimes easy to forget all the key stats hat are bubbling away in the background. For example it hasn’t been reported to any great length in the media, but yesterday’s GDP growth figures for the UK showed the UK economy suffered its worst quarterly growth in over a decade. Whilst the services sector expanded slightly by just 0.2%, both the construction and manufacturing sectors saw further contractions over the last 3 months. Year on year the UK economy shrank by 1.2%, with zero growth in the last quarter.
Tonight we have the next interest rate decision from the Federal Reserve at 7pm. No change are expected with the fed currently holding for further data developments before acting on more policy changes.
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