Pound Surges

The pound has advanced to fresh multi-week highs against the Euro and US Dollar as the currency market reacted to a surprising announcement from UK Prime Minister Theresa May.

After May revealed her intention to hold a general election on June 8th, GBP/EUR jumped to 1.1890 and GBPUSD jumped to 1.27.
Despite previously asserting that an election wouldn’t be held until the next scheduled one in 2020, May announced that it was the only way of overcoming the current divisions in Westminster and making a success of Brexit.

The surge has continued this morning and we currently see the dollar above 1.28 and the euro at 1.19

We have seen weakness in the Dollar, the reason for this came from President Trump himself commenting that the U.S Dollar was “too strong”, which indicated that the Government would like a weaker Dollar (This would help exports)- this alongside weak data on Friday which has now signalled to the markets that an interest rate hike in June from the Fed is now unlikely (Great news for those of you buying the Dollar!).

Moving on now to the French elections this month, things are getting too close to call with both candidates looking likely to win in the first round; it is said that Marine le Pen is expected to win the first round of elections and then lose at the final stage- so this is what the markets are pricing in. Opinion polls are also showing a similar story, but as we all know, they are not the most accurate indicators. If the last year has taught us anything is to expect the unexpected when it comes to politics, so though a Le Pen victory doesn’t look likely, I wouldn’t disregard it completely.

The positive for Euro buyers is that these elections could provide some great opportunities amongst the volatility, so if you do have a Euro requirement coming up, it is worth keeping an eye on opinion polls and the news as this is what will be moving the Euro over the next 3-4 weeks.

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