PO­LIT­I­CAL COMPASS

Living France - - The Essentials -

Euro­pean pol­i­tics have had a big im­pact on the ex­change rate, and with a forth­com­ing UK general elec­tion and the French pres­i­den­tial race, it looks set to con­tinue. News that there would be a general elec­tion in the UK on 8 June was wel­comed by the mar­kets. When Theresa May an­nounced the snap elec­tion on 18 April, the pound made sig­nif­i­cant gains against the euro and dol­lar and the GBP/EUR ex­change rate reached its high­est level in 2017.

But the ex­change rate con­tin­ued to be driven by po­lit­i­cal con­cerns across the Chan­nel. Fol­low­ing the first round of the French pres­i­den­tial vote, the euro rose against the pound and the ex­change rate dropped from €1.195 to €1.187 to the pound, with the pound then hit­ting a twoweek low. How­ever, at the time of writ­ing, the pound is gain­ing strength once again.

Po­lit­i­cal con­cerns will no doubt con­tinue to drive the ex­change rate and with the French pres­i­den­tial race end­ing on 7 May and the general elec­tion on 8 June, it will be in­ter­est­ing to see what the fu­ture holds for the pound and the euro.

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