Dollar to Naira News

Pound To Euro Rate Tipped To Continue To Grind Higher Say Rabobank – ExchangeRates

By Tim Clayton

According to Rabobank, the French political developments are more interesting than the relatively boring UK General Election with the crucial second round of assembly elections on July 7th, three days after a new UK House of Commons is elected.

The bank also expects French politics are liable to have a more substantial market impact with the Euro potentially vulnerable while a UK Labour Party victory could lead to a relief rally for the Pound.

The Pound to Euro (GBP/EUR) exchange rate dipped to 1.1775 in immediate response to the French result, but it has recovered to above 1.18 and Rabobank expects gains to at least 1.19 over the next few months.

Rabobank notes some market opinion that the first-round outcome could have been worse and that the efforts to avoid splitting the anti-right vote by removing candidates could prevent National Rally (RN) from securing an overall majority in the assembly.

Nevertheless, Rabobank warns that deadlock in parliament will prevent any improvement in the weak French budget position and there is likely to be increased friction with the EU Commission in Brussels.

The bank considers that the relative political outlook will favour the Pound and it expects this will translate into gradual GBP/EUR gains over the next few months.

Key Quotes:

“PM Sunak may have surprised most commentators with the timing of the UK’s July 4 ballot, but that was nothing compared with President Macron’s shocking early election gamble.”

“Going by the results of the first round of France’s ballot, Macron’s bet looks to have been a bad one, with Le Pen’s far-right party coming out on top.”

“A gridlocked parliament may mean that significant changes in policy direction are less likely.”

“By contrast to the shockwaves being felt in France, UK politics is currently relatively boring.”

“From an investors’ perspective this is a better position.”

“Current Chancellor Hunt understands that prudent fiscal management and dull politics are good for market stability.”

“The UK public debt/GDP ratio is currently at its largest level since 1961 meaning there is precious little fiscal leeway in the UK.”

“We expect EUR/GBP 0.84 to be revisited on a 1-to-3-month view.”

See Dollar to Naira black market today, Pound to Naira, Euro to Naira, Dollar to Naira CBN rate and Dollar to Naira Bank rate today.

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