Pound to Euro exchange rates dip heading into French Polling (Joshua Privett)

Politics is still the name of the game in governing Pound to Euro exchange rates, with the serious improvements recorded across Tuesday and Wednesday slightly drifting away heading into the weekend.

So why the dip?

This weekend is a busy one. French citizens go to the polls for the first round of their elections, and the UK General Election campaigning will be kicking into high gear.

Investors were unlikely to be wanting to hold onto Sterling heading into the weekend. With the first weekend of campaigning, and lots of new information – like key features of each major party’s manifesto – being released, investors would be nervous about potential market reaction come Monday. Hence the slight losses on buying Euro rates as UK trading was closing for the weekend, Sterling positions were being sold off in droves.

French election

Whilst the UK General Election will be a key feature for Pound to Euro exchange rates, the French election will be the key market mover for Pound to Euro and Euro to Pound exchange rates until the result of the second round of voting on May 7th/8th.

The first round narrows the field down to two candidates, which then results in a second round of voting.

Currently there is a 4-way race in the first round, with polls so tight, each candidate seems to have about 20% support. It is a great unknown who will reach the second round, but purely from a currency perspective, Euro buyers should be wishing for Marine Le Pen, the anti-EU candidate, to be making in through.

She is the key point of concern for markets with her talk of EU membership being put to a Referendum, and the results on Monday will inform Euro buying trends for weeks to come.

As such, trends will emerge quickly once the results come in early Monday morning, and in such a politically fluid landscape, a premium is put on being a well-informed purchaser, and being able to move quickly to avoid being ‘last to the party’ should any opportunities emerge, or to avoid being ‘caught out’ should rates deteriorate whilst you are busy at work during the day.

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