Pound to euro exchange rate: Hung parliament concerns grow – should you buy euros now?

The pound continues to trade flat against the euro today, with no obvious outcome of the general election. While the pound saw boosts in the last month with traders waging on a Conservative majority, the potential for a hung parliament could be detrimental for sterling. With the general election due on 12 December, the campaigning parties are entering into the final stretch. The final result will certainly have an impact on the pound’s position.

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The pound is currently trading at a rate of 1.1724 against the euro according to Bloomberg at the time of writing.

Speaking exclusively to Express.co.uk, Michael Brown, Senior Currency Analyst at Caxton FX said: “Sterling traded flat against the euro on Friday, with little in the way of economic releases or impactful political developments to impact price action.

“In the week ahead, the direction of travel for the pound will continue to hinge on political developments, as the election campaign enters its final stretch. Should the Conservatives maintain their present poll lead, the pound will likely remain well-supported.

“However, any signs of the polls tightening – potentially edging into hung Parliament territory – will pose a headwind to the pound.”

Poll Expert Sir John Curtice warned on Sunday that according to prediction polls if the Tories drop just four percentage points “we could be entering hung parliament territory.”

The remarks come in the wake of MPR polling analysis that accurately predicted the election outcome two years ago.

This time the YouGov poll suggested that the Conservatives would win 359 seats, Labour 211, the SNP 43 and the Liberal Democrats 13 if the election were held today.

However, the expert also pointed out that a Conservative win “was not in the bag” yet.

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Meanwhile Michael Brown also spoke up regarding the poll predictions, saying: “Sterling popped to a fresh 6-month high against the common currency on Wednesday, boosted by YouGov’s MRP polling model – which correctly predicted the 2017 election result – forecasting a Conservative majority of 68 come polling day.

“As such, market participants began to further price in the likelihood of a Tory victory, however, as with all opinion polls, the model should be looked at with a healthy pinch of salt.

“Markets will likely remain rangebound, with Thanksgiving in the US draining liquidity and thinning trading volumes.”

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So, what does this mean for travellers heading to Europe over the next few weeks?

The Post Office is currently offering a rate of €1.1308 for over £400 and €1.1531 for over £1,000.

If things remain as they have been, the pound may see little change in direction in the lead up to 12 December, however, volatility should be expected following the results.

For travellers heading off on holiday around this date, buying currency in advance is advised.

Holidaymakers should keep an eye on relevant news and updates, as well as staying in the loop about impending political decisions.

Stafford-Taylor said: “The upcoming general election spells further uncertainty for the pound as it remains vulnerable to fluctuations while the UK waits to find out exactly how the election will play out and who will be in charge at number ten.

Ian Strafford-Taylor, CEO of international money specialist Equals shared his opinion on the best way to secure travel money rates.

He said: “The political landscape naturally has a huge influence on the pound and its performance, so we can expect even more movement in the coming weeks as the UK braces itself for a general election.

“The political landscape naturally has a huge influence on the pound and its performance, so we can expect even more movement in the coming weeks as the UK braces itself for a general election.”

“The safest way to guarantee getting an exchange rate you’re happy with is to lock-in the rate on a prepaid card when the pound is doing well.

“It also means you avoid losing money when you return from your trip and have to change any leftover cash back into pounds if the exchange rate has worsened.”

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