The pound has gone marching up towards new highs against the euro in early trading this morning and could well, by the time you read this, be at its highest rate since the EU referendum.
The first question then becomes, is a Conservative victory on Thursday priced into the sterling exchange rate? And the second question, is that a sensible thing to do?
There is no clear answer to either question; it’s a gamble. The currency market analysts are looking at the same opinion polls as everyone else and the result is not a foregone conclusion at all. Many of the polling experts have been wildly wrong in the past couple of elections.
Even if they are right and Johnson does win the election on Thursday, the feeling among our traders is that the pound may not go much higher. But it will probably go very rapidly downhill if he doesn’t. I should add that this is just a comment on the market – not on any personal preference among our traders.
There is also the small problem of what comes after. I can only assume it’s a scheduling coincidence that Sky TV has a series starting on Wednesday about an asteroid about to hit central Europe in eight days, and what people do to prepare for it. Both businesses operating in Europe, especially recruiting staff from Europe, and individuals hoping to move to Europe, will be looking nervously at the manifesto plans for a “points-based immigration system”. Moreover, given that few experts seem to believe (“experts”, perhaps I should add quotation marks) that a trade deal can be agreed in a year, we may be seeing another no-deal in a year’s time.
So the next year will be crucial. The transition period – if it happens – could be the chance to move your business or yourself to Europe. A forward contract will lock in today’s excellent rate for the year ahead.
Please call your trader on 020 7898 0541. We had one of our busiest ever weeks last week and expect to be even busier this week.
Don’t forget our extended trading times: 8.30am to 8pm on Thursday and 6am to 7pm on Friday. But I recommend speaking to your trader before then if at all possible.
