Pound down ahead of UK elections

30 May, 2017

Matthew Boyle

Last week was a bad week for the pound as it lost ground across the board as we get closer to the election on June 8th. General elections always breed uncertainty which is bad for a currency, however, political events are also not helping currently. Following Teresa Mays U-turn on her social care policy t seems the Conservative party are not as far ahead as first thought – something that was until recently pushing strength to the pound. Fears over a potential hung parliament are increasing as a mid-week poll showed Labour have closed the lead to 5 points behind the Tory party which is causing Sterling weakness over Brexit. Adding to its woes Thursday showed UK GDP growth slowing to 0.2% from a predicted 0.3%. And at present, the Euro is strong amidst hints they are likely to taper their ongoing Q.E programme also only encouraging GBP>EUR rates to drop. Throughout the course of the week, the Pound lost 2 cents against the Euro and 2.5 cents against the Dollar.

This week is a particularly busy week with several key releases before the start of the new month on Thursday, so don’t be surprised if we continue to see big movements in the rate. With concerns increasing over Mays policy’s by the day, and as we get closer to the Uk election we could see the Pound suffer further. And unless you would like to gamble on a huge Tory win we may not see it recover as much as is expected, particularly if as is suggested the ECB reduce their Q.E programme next month.

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