Home Daily Commentaries UK election the main driver for volatility this week

UK election the main driver for volatility this week

Daily Currency Update

The UK could be on the verge of electing its first Labour government in 14 years. Economic concerns are at the forefront as the country heads to the polls on July 4, raising questions about the extent of the economic policy differences between the two major parties. Labour has centred its campaign on the promise of change, but will this be sufficient to sway voters and bring about a new administration after Thursday? The outcome of this election could significantly impact the FX market, as traders and investors anticipate potential shifts in economic policies and their implications for the British economy

Key Movers

The euro has been steadily depreciating against the US dollar, with the exchange rate currently hovering around 1.0730. This downward trend is largely driven by market anxieties surrounding the political landscape in France. Specifically, there is significant concern about the possibility of Marine Le Pen’s far-right party securing a majority in the upcoming elections. Such an outcome is perceived as potentially more detrimental to the euro than the prospect of a hung parliament, where no single party has a majority. The uncertainty and potential policy shifts associated with a far-right majority fuel these market fears, exerting additional pressure on the euro.

Expected Ranges

  • GBP/USD: 1.2585 - 1.2655 ▼
  • GBP/EUR: 1.1755 - 1.1825 ▲
  • GBP/AUD: 1.8935 - 1.9015 ▼
  • EUR/USD: 1.0675 - 1.0735 ▼

Written by

See Wah Li


See Wah is passionate about supporting positive transformations when it comes to managing foreign exchange. As a Senior Currency Consultant at OFX, his goal is to help businesses make informed decisions, alleviate risks, and enhance their currency strategies for success. With over 6 years of experience in the foreign exchange market, See Wah’s strength lies in developing effective solutions to help navigate the complexities of currency fluctuations and mitigate their impacts on business profitability.