EDITOR’S NOTE: The Pound is still at a seven-year high against the Euro thanks to problems in Greece, but uncertain elections pending in the UK have taken some of the shine of the Pound. Foreign currency exchange specialist Luke Trevail looks at the factors driving exchange rates, and what the near future might hold.
At Easter time we’re full of promise of new life and changes for the better happening seemingly overnight. Tenuously perhaps but this is a good way to look at the currency market.
The euro is clinging on desperately as it weathers the storm created by our Greek friends. The restructuring of their debt and sweet talking of steely Angela Merkel has so far calmed the waters of what still threatens to be a big problem moving forward.
In April the market will not suffer fools lightly, however, with both the Greek situation likely to pull the market one way and the pending UK General Election pulling it the other, as the Euro Sterling tug-of-war becomes more ferocious with numerous factors working against each of them to get the upper hand on the market.
May’s election is already being touted as the closest run for generations, and with the Tories already stating that they will not form another coalition, the threat of a hung-Parliament, and perhaps another election, is a real possibility. This uncertainty will damage the pound, which hates political tensions, so those of you with Euros to buy are well placed to do something soon while we’re still at a near 7 year high on the market.
Those of you that don’t have a crystal ball may decide to cash your chips in soon as we’re trading consistently above €1.35, which has been dreamland for most people for a great number of years. For the gamblers out there, you could do well by sitting on your hands, but be warned that a spin on that final roulette wheel can often work against you.