The UK general election are closing in with little under a fortnight to go, Brits are once again preparing to head to the polls on June 8. Interestingly, the upcoming election is now considered to be one of the most important in history. Well, why not. It will most probably determine how a Europe-free Britain will look like.
The world saw Trump and Brexit becoming a reality. The French played their cards safe by choosing Emmanuel Macron as their next President. We’re now set to see if the UK will follow the safe path taken by the French, or the path that might change the country’s political and economic landscape. If the latter is what voters want then the Tories will be their best option. Given their manifesto, the Conservatives will not be afraid to make some unpopular changes after winning the UK general election.
But what does this mean for the pound? And how does this affect you if you need to move money abroad?
Theresa May believes that Brexit is the way to a brighter future for Britain while others think that Brexit is unfair. That said, Sterling has been particularly sensitive in the aftermath of Brexit. Polls and analysts expect the conservative party to win big on 8 June despite Labour’s popular manifesto pledges. The highlight of the UK elections is which party will make Brexit a success or a failure. We already saw the impacts of a weaker pound when the UK voted to leave the EU. The pound witnessed a flash crash after Britain made the ‘Brexit’ decision. The currency was down by over 11.0% to a low as 1.3239 against the dollar and 1.0801 against the euro
This movement had a significant impact on international money transfers.
For example, £100,000 would have worth $145,760, but after May’s decision of the snap elections $128,176- a difference of $17,584.
However, the pound reacted positively to Theresa May’s announcement of the general elections. The announcement of a snap general election pushed the pound by around 1pc last against its major peers. Yet, sterling does remain relatively weak.
At the time of writing, the pound is struggling to stay above $1.30. Sterling surpassed $1.30 last week after the release of strong UK retail sales data. Dollar buyers should consider buying their currencies as this is the best it’s been in a long time. That said, if you have a transaction to make, it would be wise to get in touch as the General Elections is a big event and the pound might be at risk of falling even if the Tories win. This is mainly because their focus will be back on the Brexit negotiations. And no one knows how Brexit will end.
Now, it might get you thinking about the best option for you to pay your international suppliers. Are you thinking about your high-street bank? Well, you are right as this might be the quickest way for you. But if you dig into things you might find some important facts. Recently, HSBC has been exposed for its unfair foreign exchange rates. Halifax was listed as the second worst foreign exchange provider according to the data gathered by FX comparison websites. Interestingly, the survey also revealed that eight in ten people are currently using their bank to send money overseas but less than 40% of them are happy with the rates. You probably always thought that sending money abroad through your banks makes perfect sense. Banks seem be the obvious choice for people. That’s it. But, if you spare yourself some time and do your homework, and you could start saving money by using a currency expert as an alternative to your bank. High street banks can charge between £20 and £40 for each transfer. While this might seem small in relation to your international invoices, imagine the impact on regular payments.
These days consumers want control over services they use. With Indigo FX, you will speak to a member of our dedicated customer service team who will guide you and provide you expert market guidance for your currency transaction. You could also navigate volatility by choosing tools like a ‘forward contract’ which allows you to secure a rate for up to two years. In doing so, you protect yourself from any foreign exchange movements before the UK general elections.
Kirpal Ubhoo, Indigo FX, CEO highlights:
”While FX can be quite traditional, there are many ways that advances on the Fin Tech side are filtering through. Online payment platforms are now the norm and we are very proud of ours. Put together, the technology allows our clients to transact at times that suit them, and not just when their brokers are at their trading desks. FX markets are 24 hours – and so are we!”
Despite the Pound showing resilience, the fact remains there are still a number of factors pressuring its value, the UK general election being one of these. Brexit, political and economic events all factor in when it comes to the nations currency. Those of you that are exposed to currency fluctuations need to be risk adverse. By working together with a currency specialist you will have the resources to make an educated decision on your cross border payments taking advantage of buying and selling at key levels.
Back to the UK general elections, polling stations will be open for people to cast their votes from 7am to 10pm on the day of the election. The results are expected in the early hours of the following morning, however, an exit poll on the day will give an indication of the results already.