Pound continues to struggle

1 June, 2017

Nakhil Mahra

Yesterday morning GBP opened half a cent down on both major currency pairings, with polls overnight suggesting that the Tories will not be winning with a majority vote and with a hung parliament now becoming a real prospect. This uncertainty has not gone down well with investors with them currently favouring the Euro as they see this as a safer option with the current position of the election. With the election now exactly a week away we can expect there to be further downside for Sterling if Labour continues their momentum.

As the day progressed and as data was released there was no major change in the rates. With both Unemployment data from Germany and Net Lending to individuals in the UK coming in below expectations, it did nothing to affect the rates and consolidating on the Euro and US Dollar gains. With a relatively quiet day in the US it was mainly relying on UK and Euro data to post below expectations to hold its own throughout the day. However, the one bit of data to come out of the US came in below expectations meaning gains were short lived. The EURUSD rate now trading just below 50 pips of its highest levels of 2017. Staying across the pond, Canada posted better than expected Gross Domestic Product (GDP) figures to hold onto the gains made last week.

Today we have data from all three major currencies which is sure to impact the rates with any negative UK data likely to further weaken the Pound and further increasing your costs to send money abroad. If you have any upcoming requirements don’t get caught out and contact your account manager today.