020 7898 0500Sterling will be driven by further election updates throughout the week. What once appeared to be a done deal for a Conservative majority now hangs in the balance in a way hardly anybody could have anticipated. Since May’s announcement the opinion polls have narrowed with one poll at the weekend putting the Conservative’s on 40 and Labour on 39.
Anything other than a Conservative landslide would be viewed as a failure in what May says she set out to do in calling the election: securing a bigger mandate for Brexit negotiations. Billionaire investor George Soros stated at the World Economic Forum in January that he believes May ‘will not last’ and that Britons are ‘in denial’.
In terms of economic data, it is worth noting that the purchasing managers’ index for the service sector is released in the UK and is a major gauge of economic activity. However, the effect on the currency could be muted given the amount of news flow and opinion set to hit the wires. It is likely that we will see a “risk-off” approach towards sterling throughout the week as investors take their money off the table ahead of this crucial event.
