This week sees the general election in the UK. It’s a huge risk event for currency. Watch Adrian Jacob, Director, discuss the possible outcomes and the effect it has on Sterling.
There are three possible alternatives as to what might happen. There’s the Conservatives winning by a landslide – if this happens, it will be very positive for Sterling. If there is a hung parliament, we would expect this to be not so beneficial for Sterling…in fact we would expect it to weaken considerably as the one thing the market doesn’t like is indecision. If Labour wins, we would also expect this to be bad news for Sterling.
In short, it’s up in the air; we don’t know exactly what will happen and so we don’t know how Sterling will react. Currency is simply a derivative of what you guys do. To try and maintain your bottom line and to try to maintain your profit, we advise taking the risk out of what you do. Ring your client executives before the election so you can guarantee what rate you will get regardless of what happens. After Brexit, we certainly saw a 12% swing and this caused a lot of people to lose a lot of money – it is a gamble and we advise you not to take the risk.
For more information on how specific currencies will be affected, read our Daily Market Commentary.
Posted in Business Resources on Jun 6 2017