GBP/EUR sitting in high 1.18’s

The pound has been relatively stable over the past two days trading and still holding on to its multi month highs against the other majors. With a lack of opinion polls being released there hasn’t been much for investors to move on. Most are still clinging on to the hope of a Conservative majority which has boosted the Pound by around 1.5% since early last week.

Today’s poor GDP reading, and various other data points had little to no effect on the exchange rates as the election again dominates the price of your currency. With the next meaningful opinion poll due to be published this evening we could see some movement after the close of play, any shortening of the conservatives’ lead would be deemed a negative for the Pound.

With the Pound now 7% higher against the Euro since October has the result been priced in by Investors? I would say yes, if the result does go the way the polls suggest you could see the Pound gain a little more ground. However, if there is another shock once the polls have been counted and a hung parliament or a Labour majority prevails you could easily see the Pound lose 7% and then some.

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