Markets Volatile Ahead Of Elections

By Simon Eastman

Markets continued where they left off at the end of June, with sterling volatile across the board as the general election looms tomorrow.

We have seen GBP/EUR move up and down in a 2 cent range over the last month, peaking at levels not seen since 2022, but as June signed off, rates were back down at multi week lows.

There was some respite yesterday as we saw sterling gain back nearly a cent against the single currency as flat Consumer prices gave little to work with. Coupled with the French elections which culminate on Sunday, which so far shows the Far Right leading polls with Macron third, the euro could remain under pressure as the week goes on. A lack of data for the Eurozone but a flurry of ECB members speeches will possibly give some guidance if the French don’t take all the limelight, while the UK again has nothing to report.

The UK does have an election to worry about, with polls showing Labour leading but with Reform doing well in polls and the Liberal Democrats vying for votes as their intrepid leader takes part in increasingly more exciting endeavours to garner public support, it’s definitely not over until it’s over. Voters take to the booths on Thursday with result likely overnight into Friday.

The past couple of weeks has seen the US dollar also do well against the pound and euro, gaining ground against both. Today we have a vast amount of data from across the pond as the Americans prepare for Independence Day tomorrow and markets there close.

Today sees speeches from Fed members alongside mortgage approval, jobless claims, PMI figures and various readings from the IMS (Institute for Supply Management), culminating with the minutes from the recent Federal Reserve OPC meeting where we’ll hear about their plans for interest rates going forward.

With plenty of unknowns around the corner, anyone with sterling in hand and a transfer to make in the coming weeks, get in touch with the team today to discuss your options. With the EU mainly closed for summer break in August, you may find those completions getting pushed through this month, so don’t get caught on the hop, secure your funds sooner rather than later and take all the risk out of buying your overseas Place in the Sun.