Expect currency volatility over the election period
With Thursday’s election looming, you might be wondering what the outcome could mean for the currency markets. The following story is shared in association with foreign exchange experts and Walpole Corporate Partners, Global Reach Partners
Are you prepared for Thursday’s election?
With Thursday’s election looming, you might be wondering what the outcome could mean for the currency markets. After all, the volatility that we saw after the referendum was the highest since 2009. It’s hard to predict an outcome after the latest poll results, which showed the Conservatives lead being cut to only one point; a cut of 11 points in over two weeks.
The terrible events in London on Saturday night have left the UK shaken, however, we have not seen any increased volatility as a result and no real market impact.
What are the possible outcomes and how could they affect the market?
Most likely outcomes (based on the current polls):
- A Conservative large majority win – Sterling would most likely test recent highs and trade up by over 3%
- Conservative win with small majority – We would expect to see modest Sterling strength
Less likely outcomes (based on the current polls):
- Hung Parliament with no overall majority – We are likely to see a dip with the increased uncertainty
- Labour Government – This would have the biggest impact on Sterling and could mean a fall of close to 5%
The potential impact to your requirement
If you have a requirement to exchange £500,000 to US Dollars and the outcome of the election is a Labour government, it could result in you receiving $32,000 less for your money.