Election 2017: The game is constantly changing
In the Eurozone, the euro was on average flat against the other dozen most actively-traded currencies for a second week. It was unchanged against the US and Canadian dollars, the Japanese yen and the British pound. The ranges were moderate too: a cent and a half each in the case of sterling and the Greenback.
Inflation was the most noticeable feature of the €Z ecostats. In Spain it slowed from 2.6% to 2.0%, in Germany from 2.0% to 1.4% and in pan-Euroland from 1.9% to 1.4%. Numbers like that, and the direction in which they are moving, would make it hard for the European Central Bank to tighten monetary policy at the coming week's meeting, even if it were minded to.
All eyes are now on the outcome of the election on Thursday. The game is constantly changing; the election was instigated on the back of upcoming Brexit negations, but soon the NHS, mental health and social care came into the forefront. Now with 2 days to go all issues appear to have been eclipsed by national security and how the candidates will deal with terrorism. Surprisingly Labour is closing the gap on the Conservatives according to most opinion polls.
The upcoming election has put pressure on the pound nonetheless it has largely held its ground and if the outcome preferred by investors of a Conservative government with a working majority is delivered this may continue. However we remember that last year investors were shocked to wake up on June 24 to find that the UK was going to be leaving the EU. The same goes for the outcome of the US presidential election and the last UK general election in 2015. It shows that opinion polls are not infallible and we need to perhaps take them with a ‘pinch of salt’ when using them as indicators of voting outcomes. This election is certainly a two-horse race.
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