Where next for the Pound? (Daniel Johnson)

Snap Election causes the Pound to soar in value

Theresa May called for an election this week, due to take place on 8th June. Historically, this would weaken the currency in question, however with a conservative government seen as a positive for the UK economy we have seen investor confidence rise and the Pound has benefited against nearly all major currencies. It was a shrewd move by May calling the election when the opposition is so weak.

GBP/EUR – French election set to cause volatility

The French election is currently a four horse race. With Macron, Le Pen, Fillon and an outside chance for the left wing Melenchon. The voting commences on Sunday. There has never been a majority victory on the first round of voting, so it is highly probable it will move to a second vote where the top two candidates fight it out for presidency. according to polls, it is looking like this will be between Le Pen and Macron on 7th May. Polls have been misleading in recent history however. You only have to look at the UK referendum and the US election as evidence of this. There are many who are scared to voice their opinions on immigration due to fears of being branded a racist. Slipping a folded piece of paper into a ballot box means voters can have their say without such fear. The silent vote will be very influential with 40% of French voters still undecided. The terror attack yesterday in Paris could well sway voters.

The worrying scenario for euro sellers is a Le Pen victory. Le Pen is the leader of the National Front and has stated her intentions to ditch the euro and call a referendum to leave the EU. If she gets in  expect the euro to fall significantly in value. If you are a euro seller I would suggest getting in touch with us ASAP, we have contract options available such as a forward contract which means you can trade before this event, or at least before the second round.

Is 1.20 a resistance point on GBP/EUR?

GBP/EUR came very close to 1.20 during Wednesday’s trading session. The last time this occurred was November 2015. It seems 1.20 is proving to be a resistance level. As this is the second occasion we have reached the high 1.19s only for the rates to then fall back. There is a strong possibility that due to everyone picking 1.20 as a trading level, the market readjusts due to profit taking. Provided we do not see a Le Pen victory, I would expect the 1.20 mark to remain a resistance point short term.

If  you have a currency requirement it is vital to be in touch with an experienced broker. The timing of your trade is crucial. If you have an experienced broker on board they can keep you up to date with what is happening in the market to help you make an informed decision. I will be happy to help you personally. If you let me know the the currency pair you are trading, volume and time scale I will provide a free, individual trading strategy to suit your needs. I work for one of the top brokerages in the country and as such I am in a position to better virtually every competitors rate of exchange. I specialise in property transfers, so if you Please do get in touch by contacting me at [email protected]. Thank you for reading my blog.

Testimonial

Daniel Feller

Daniel Feller and his family live in Melbourne, Australia, having made the move there from the UK some years ago. Following their decision to make extensive renovations to their Australian property Daniel needed to send money from his bank account in the UK to Australia.

Why Daniel exchanged foreign currency

Daniel and his family needed to transfer Pounds to Australian Dollars and send the money from the UK to Australia to fund their house renovations. Having been recommended to use Foreign Currency Direct by a friend in Melbourne who had used the service before, Daniel got in contact. Daniel was quickly speaking with his dedicated currency broker and discussing his requirements and situation in order to help maximise his Australian Dollar return. Daniel commented, ‘My dedicated broker, Daniel Johnson explained the process really clearly, and it all sounded straightforward. I had been recommended by a friend so I knew they were trustworthy’.

With a significant amount of Australian Dollars required, some complex transactions and the timing important, Daniel was looking to get the best exchange rate at the time. ‘The service was very efficient, a quick discussion and I needed to fill in some online forms. The security process was simple and reassuring and I was very happy with the exchange rate I received’.

What Daniel had to say about the service

Following the introduction by a friend, Daniel used Foreign Currency Direct to convert his Pounds to Australian Dollars. After the transaction Daniel said, ‘It was quick and easy. Dealing with the same person throughout the process was helpful as they knew everything about my situation. I was also very impressed by the speed of the transfer to Australia!’