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04/07/24
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GBP Flat as UK Votes
The focus in Europe was on politics again as UK voters went to the polls in national elections.
The United States’ July 4 holiday resulted in thin trading, amplified as investors waited to see just how big a majority the Labor Party may get when Britain’s election exit poll and results start coming out in the day.
Markets are prepared for a change due to opinion polls having for months put the Center-left party on track for a massive victory over the Conservatives, who have retained power for 14 years.
State Street Global Markets’ head of macro strategy, Michael Metcalfe, said after the election had been very negative of sterling for a long time, institutional investors are now going into the election neutral.
He said that was partly due to political risk surging in France, which will hold the second round of its parliamentary elections on Sunday, and in the U.S. before its Presidential election in Nov.
Metcalfe said the UK has oddly ended up with a neutral position. He added that he didn’t think the result of the election had ever been in any doubt.
The Pound had inched up to 84.6 pence per euro and $1.2760 leaving it up nearly 2.2% and 4% versus the respective currencies since Apr
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