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Big week ahead for May as UK and Europe goes to polls

GBP - British Pound

The pound is poised to judge Theresa May once again this week ahead of the European elections which begin on Thursday. It was a torrid time for sterling last week as it fell 2% with significant drops against the Euro and US Dollar. Indeed against the US Dollar it dropped to three-month lows whilst it also slid for its ninth consecutive day in a row against the Euro. The European elections are set to see a raft of populist parties gain but it is at home in the UK where the biggest waves could be felt. With Nigel Farage's Brexit Party leading extensively in the polls and the Labour Party and Tories expected to suffer, as a result the time could be up for the Prime Minister sooner than she's like. Whilst the Prime Minister is set to push her Withdrawal Agreement into Parliament for a vote one last time many Tory backbenches are already positioning themselves to be the next leader/PM with Boris Johnson leading at the bookies and throwing his hat in the ring. Away from this we've long maintained that the border between Brexit certainty and uncertainty has always been GBP/USD 1.30 however the pound is now a long way from this level with the risks of a no-deal Brexit rearing its ugly head once again.

Key Movers

Perhaps Theresa May could take solace and hope from the elections in Australia where Scott Morrison led a one man campaign and caused an upset returning his conservative party back to government. This was one of the biggest upsets in Australian politics for a while and many pollsters are still sat scratching their heads as they are reminded of Brexit and the US presidential election. Despite the rebound for the Aussie dollar its prospects still look thin with the market pricing an interest rate cut from the Reserve Bank of Australia when it next meets in June.

Expected Ranges

GBP/USD: 1.2700 - 1.2840 ▼

GBP/EUR: 1.1380 - 1.1520 ▼

GBP/AUD: 1.8360 - 1.8450 ▼

GBP/NZD: 1.9450 - 1.9520 ▲

GBP/CAD: 1.7090 - 1.7140 ▼