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.