Election Campaign Underway
6 November, 2019
With Brexit now on the back burner and the general election campaigns only just starting to take place the currency market seemingly calmed down from the volatile state last month. With an election being held on the 12th of December, the standing parties have all begun their campaigns in the race for No 10. Although a Conservative majority is somewhat expected there is a genuine push from both the Labour party and the Liberal Democrats. All parties are desperately outlining their policies on Brexit and why a vote for their party will end the never ending saga of leaving the European Union. The conservatives are sticking by their deal, the Labour party are suggesting a second referendum and the Lib Dems wants to scrap Brexit all together.
In the coming weeks it will become slightly clearer what the electorate is thinking and where the votes are heading as various polls will be released. Keep this in mind as historically when these polls are released, albeit without any notice, the rates tend to react in an erratic manor. As we have seen over the past 3 years uncertainty isn’t Sterling’s friend and what is more uncertain than a 3 horse race for No 10 with all 3 having completely different visions on the Brexit outcome. A hung parliament may be on the cards which could spell all sorts of trouble for the Conservatives who would then need to find another party to form a government which would more than likely see the current deal with the EU turn to ashes. Should that outcome become a reality in just over 4 weeks there is no reason we could head back to the Pound to Euro lows of sub 1.10 we had seen in August.
On a lighter note, the Pound was handed a boost of around half a cent on both the Euro and Dollar as the UK posted positive Markit Services PMI, the figure was slightly better than originally expected. The US also posted better than expected Non-Manufacturing PMI recoding 54.7 from the expected 52.6. This morning at 9am the EU release Markit PMI and retail sales figures, the former expected to remain at 51.8 and the latter is expected to record a better figure than last month. Should that be the case expect Sterling to be on the back foot against the Euro early doors.
If you have a requirement for currency in the coming weeks it may be prudent and getting something booked in sooner rather than later. You can take advantage of Sterling’s lift yesterday and remove your exposure from the unpredictable and uncertain time we are in. Call you broker today for some friendly guidance.
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