British pound is 'bloodnerveus'

World June 1, 2017 11:18

- The British pound is again under pressure. Signals that the British Conservatives can end up in a neck-on-neck race with Labor during the elections makes the market 'bloodnerveus'.

The markets want clarity. A victory at the tip of Prime Minister May and Conservatives is insufficient for large fund managers to make hundreds of millions, with the British pound already the second worst performing currency last month.

The British pound stood at € 1,1449 at midnight on Thursday.

According to ING, therefore, in the early elections on June 8, a victory of May with a minimum of fifty seats is needed to prevent a negative response to the British pound.

'The elections seemed to be a non-event, nowadays, foreign exchange traders dare to predict the outcome. That leads to great uncertainty. The pound sterling is bloodnerveus, 'says Laurens Maartens, the Dutch Payment and Exchange Company (NBWM).

According to Deutsche Bank, everything below the limit of fifty seats is not profitable for the market. It will lead to a decline in the pound.

If May's elections are still considered to be the most likely outcome in recent days, it will not help the pound. There will be no fierce market reaction upward, AXA Investment Management proposes. AXA itself provides 'renewed weakness' of pound sterling in coming months.

That Labor Candidate Corbyn has almost halved the 20-hole gap with the Conservative in the polls, has put the British pound sterling under pressure. The pound was not helped by the downward revision of growth in the first quarter.

Currency specialist Enrique Diaz of Ebury speaks of a 'dramatic catch-up' of Labor leader Corbyn.

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