Good Morning. The pound rose yesterday, again on opinion polls. The latest poll showed an outright majority for the conservatives, and this strengthened the pound. Also helping GBP/EUR rates climb was the Euro coming under pressure on persistent concerns about how Greece will repay it’s debts. Rates this morning are as follows:
- GBP/EUR 1.1379
- GBP/USD 1.5399
- GBP/AUD 1.6530
- GBP/NZD 2.1644
- GBP/CAD 1.5432
- GBP/CHF 1.6303
- GBP/ZAR 11.310
- GBP/JPY 142.58
- EUR/USD 1.3532
Most recent polls have suggested the May 6 vote will result in no one party winning an overall majority. Last year polls had consistently shown a clear victory for the Conservatives. In recent weeks their lead has shriveled, suggesting no overall winner in the election.
Sterling has weakened because the prospect of a hung parliament has unsettled financial markets, as it casts doubt over whether there would be any agreement to cut Britain’s record Budget deficit.
Labour has warned that taking too sharp an axe to the deficit will hurt a fragile economic recovery, while the conservatives want to slash spending and borrowing to bring about a swifter reduction in the deficit.
With these dividing views, investors are worried that a hung Parliament could struggle to push through a plan to repair the country’s finances, which would have a negative effect on the pound. As a result, Sterling has been moving on the whim of opinion polls.
When one poll suggests an outright victory for the Conservatives, Sterling strengthens. When a different poll suggests a Labour victory or a hung parliament, Sterling weakens. This has caused volatile swings in exchange rates as polls are published.
It’s the Greek debt story – still! There is a lot of uncertainty surrounding Europe, and this is helping those that need to buy Euros. don’t be complacent though, another poll indicating a hung parliament, and the pound may fall again.
We’re close to 2 month highs against the Euro and US Dollar. To take advantage or discuss your requirements, click the links below to register a free account.
Have a great weekend.
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