The Pound continues to lose attraction with just weeks left before the General Election. It’s now becoming clear that voters will not be taking to the polls to vote on Brexit, research finds. Whilst polls continue to show the Conservatives leading the race by 20 points, Labour’s manifesto and pledge to save the NHS could attract some last minute voters.
It seems to be having some affect in the currency markets, little economic data has given investors to lose faith in the Pound, today could be that day.
Perhaps, markets are losing faith in a secure victory for the conservatives, or perhaps this is the hangover period following last week’s Super Thursday. In any event, what can we expect from today’s data?
The Bank of England upgraded their forecasts for growth in 2017, so it’s not difficult to perceive Consumer Price figures coming in above market expectations. Short term, this could provide market cheers but secures the notion set out by the Bank of England, that higher inflation and lower wage growth could be about to hit the UK in the weeks and months ahead.
Sterling gains to be overshadowed by Euro data?
There is a concern that any gains made from higher inflation could be overshadowed by Eurozone GDP figures due at the same time. Growth within the Eurozone has been picking up pace in recent months and a stronger EU27 would outweigh any “positive” inflationary figures.
The German economic survey published by ZEW will tail behind these figures, but nevertheless will play an important part in shaping GBP/EUR today. As the powerhouse of Europe, positive sentiment towards the German economy is always welcomed by Euro investors.
Pound to Euro exchange rates have lost two cents within the last week, and this could be the start of another downward trend for the currency pair. With the General Election fast approaching and the anti-establishment movement losing ground in Europe, there’s arguably more reasons to support a stronger Euro against the Pound. GBP/EUR could test mid 1.16’s by the end of play today.