The Pound continues to struggle against the Euro, and during trading today has fallen from €1.15 to the low €1.14’s. (Click here for live interactive graphs). Part of the reason are election opinion polls, which continue to cast doubt on whether the Conservatives will win next week’s election with an improved majority. I think that ultimately it is likely that they will, and if so, this time next week GBP/EUR rates will recover back to €1.17 to €1.19.
Another reason for the drop in Pound/Euro today is due to US jobs figures. A short while ago the latest US Non-Farm payrolls figures were released, and the actual number of new jobs was much lower than expected.
This caused the GBP/USD rate to rise to $1.29 as the USD weakened and became cheaper to buy. As investors sold the USD they bought the Euro, causing it to gain strength and become more expensive to buy. You can see this inverse relationship between GBP/EUR and GBP/USD in the charts below. You can see that the graphs look quite similar until the release of the jobs data at 13:30pm, they then clearly move in opposite directions which is a good illustration of how events in the USA can affect Pound/Euro rates.
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