Monday

Sterling remains at a competitive rate against both the Euro and the US Dollar, with Sterling hitting 1.16051 against the Euro (11 am). The disappointing economic growth figures released on Friday have moved Sterling less than expected as it continues its rally against the dollar, and its current position against the Euro is also very strong considering events at the G-20. As the ongoing election campaign may wield volatility, it’s advisable to speak with your currency dealer about your future requirements and whether to fix a rate to avoid risk and take advantage of the current strong position.

The most significant data release has been April’s housing data from Hometrack. Whilst this has revealed an upturn with the annual pace of growth the strongest for more than two years and average house prices rising by 1.8%, the figures also crucially reveal that homes for sale are entering the market at a greater rate than house hunters – likely to be due to the threat of economic and tax changes following the election.

The election is also preying on the minds of businesses as a survey by the British Chamber of Commerce has revealed that most companies fear the impact that a hung parliament will have on them.

Tuesday

Following Sterling’s gains on the Euro yesterday, the pound has weakened slightly against the Euro so far this morning although this is still relatively high for recent weeks.

New UK housing market figures may have shaken the pound this morning. The UK Mortgage approval rate has grown by 1.6K in March, greatly underachieving against market expectations of 10.0K.

As media focus in the UK surrounds Liberal Democrat leader Nick Clegg and any indication of which of the other two main parties he may or may not support in the event of a hung parliament, Sterling is likely to show a response as we enter the last ten days of election campaigning.

Wednesday

The Pound remains fairly steady against the Euro this morning, although levels seem to be falling slightly to what some consider to be a short term base as the turmoil in Greece continues.

As the British elections reach full steam the Tories have announced they will look to team up with smaller parties to avoid proposed plans that the Lib Dem’s will demand an electoral reform should results point to a hung parliament.

As the UK’s budget deficit jumped 76% through March to £152.8bn the Pound dropped somewhat yesterday against both the Euro and the Dollar.  This was in parallel with worries that the General Election next week will result in a parliament with very little parliamentary support.

Thursday

Despite the turmoil in Greece and Spain, the future for Sterling against the Euro is still not clear. The concern for GBP is that the UK has invested heavily in both countries; and it appears that this debt is unlikely to be repaid (in the short term at least). This has put even more pressure on Sterling at a time where a general election and the threat of the debit crisis spreading across Europe into the UK is creating continued uncertainty.

On a positive note, house prices in the UK have risen by 10.5% in the last year according to the Nationwide Building Society.

Friday

There are mixed thoughts as to who has come out on top after the last of the three election debates took place last night.  Some sources felt that there was no clear winner, whilst others believe that David Cameron put in a strong performance and is now the clear front runner.

The Pound has maintained a relatively stable position against the major currencies as Thursday saw the cable recuperate some of the losses seen on Wednesday.  The GBP/EUR remains strong despite minor overnight losses after positive news in Greece.

Nigel Hodges www.currencysolutions.com