Pure FX Blog

19 April 2017

Sterling Reaches 9-Month High Versus Euro, as May Calls UK Election

Sterling Reaches 9-Month High Versus Euro, as May Calls UK Election

The pound to euro interbank exchange rate has hit 1.1979 today, its highest since July 21st 2016, as prime minister Theresa May has called a general election. Image credit: William Lepretre.

by Peter Lavelle

Welcome to Pure FX’s latest update of the pound to euro interbank exchange rate.

Sterling rockets versus the common currency! The pound to euro interbank exchange rate has reached its highest in 9 months today, or since July 21st last year, at 1.1979.

The pound has strengthened against the euro, because yesterday prime minister Theresa May called for a snap general election to be held in the UK on June 8th, in 6 weeks time.

This has lifted sterling, first because Mrs. May has called this election to win a mandate for her vision of Brexit, which will boost the UK’s negotiating hand in upcoming talks.

This has also boosted the pound, because if Mrs. May’s Conservatives win a larger majority at the election, Mrs. May will be less beholden to her party’s hardliners too.

Lastly, this has strengthened sterling, because if Mrs. May holds an election now, she won’t have to hold one after Brexit talks finish in 2019, putting less pressure on the UK!

Sterling climbs, as IMF upgrades UK outlook

What’s more, the pound has also jumped against the euro, because yesterday the International Monetary Fund upgraded its outlook for UK economic growth in 2017.

According to the IMF’s newest forecasts, UK GDP will rise by 2.0% this year, +0.5% higher than its previous prediction in January, and among the highest in the G7 group of rich nations.

In particular, the IMF highlighted that economic growth “remained solid in the United Kingdom, where spending proved resilient in the aftermath of the June 2016 referendum.”

This has boosted sterling versus the common currency, because if the UK economy grows faster in 2017, this puts the UK in an excellent position during the Brexit talks.

With all this in mind, the pound to euro interbank exchange rate has hit this 9-month high today!

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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email peter.lavelle@purefx.co.uk.

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