Pound/euro exchange rate falls slightly
But Tory majority could see the pound rise
The sterling/euro (GBP/EUR) exchange rate fell slightly by mid-afternoon trading on November 19, standing at £1 to €1.1677, a 0.1549 per cent drop.
The pairing had been generally flat for the past week and is still up from its 52-week low of €1.0639.
Today’s slight tumble could be a consequence of recent eurozone construction data, which made for disappointing reading.
Data for September revealed that construction shrunk in both Spain and France, causing the single currency to struggle.
Annual construction output was worse than previously predicted, dropping by 0.7 per cent. This was the first month of contraction since January 2017.
The rate of construction output in Germany also slowed in September. The powerhouse of the eurozone narrowly avoided recession in the third quarter of this year. In a statement, the Bundesbank emphasised figures showed stabilisation in Germany’s industrial sector and stated there was no reason to fear a recession.
Sterling similarly struggled at the start of the week. On Monday November 18 investors closely monitored party leaders’ speeches to British business at the CBI conference and anticipated the television debate on November 19.
A recent ICM poll found that Boris Johnson’s Conservative party had extended its lead over the opposition to 10 points. Although the city and investors have generally been opposed to Brexit, given the possibility of a Corbyn government or further uncertainty, a conservative majority will be welcomed and would likely cause sterling to gain.
FURTHER READING: How do UK general election opinion polls help investors?