GBP/EUR Exchange Rate Rangebound as UK General Election Underway
The Pound Euro (GBP/EUR) exchange rate is stuck in a narrow range this morning as investors are reluctant to make any bullish bets until after the polls close in today’s UK general election.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1848, virtually unchanged from this morning opening rate.
Pound (GBP) in the Balance as UK Heads to the Polls
The Pound (GBP) lacks direction this morning as anxiety over today’s general election helps to cap movement in the currency.
Sterling has enjoyed significant support over the past couple of weeks, soaring to a multi-month high on the expectation that the Conservatives will secure a convincing majority.
However as a result a Tory victory has now all but been priced in, something which may result in limited upside in GBP exchange rates tomorrow in the event of a Tory majority.
GBP investors are likely to be far more wary of a hung parliament, with the threat of more political uncertainty likely to make a sizable dent in the Pound’s recent gains.
An exit poll which has accurately predicted the outcome of each election vote since 2005 will be published at 22:00 GMT, until then however it’s likely we will see investors continue to steer clear of Sterling.
How Will Lagarde’s First ECB Meeting Impact the Euro (EUR)?
In the spotlight for EUR investors today will be the conclusion of European Central Bank’s (ECB) final policy meeting of 2019.
While no policy changes are expected from the ECB this month, the meeting is still seen as significant as it will be Christine Lagarde’s first since taking the helm of the bank last month.
Lagarde’s comments will be closely scrutinised by market. EUR investors will be eager to see is she will follow in the footsteps of her predecessor Mario Draghi, or if she will seek to forge her own path on policy.
Kyle Rodda, market analyst for IG Australia suggests:
‘It’ll only be one moment in time for now, however President Lagarde’s speech could well define that will become the new normal for macroeconomic policy across the globe.’
Also set to influence the Euro (EUR) this afternoon will be the publication of the ECB’s latest economic forecasts, potentially exerting pressure if they predict weak grow and low inflation will persist into 2020.