Currency experts, Moneycorp, offers their insight and guidance into the fast moving world of foreign exchange and also discuss the events of the past month and how they impact the currency rates.

If investors had been pleased at Emmanuel Macron making it to the final run-off of the French presidential election they were delighted when he won it in early May, beating the National Front’s Marine Le Pen. There was no immediate or dramatic reaction by the euro: investors had been primed for M. Macron’s victory. However, there was appreciation that, for the third time in less than a year, EU voters had preferred a middle-of-the road leadership candidate to a more nationalist one. It helped that Angela Merkel, Germany’s chancellor, was improving her chance of re-election this September by doing well in regional ballots.

It also helped that the economic data from Euroland were pointing to an improvement in the economy. Retail sales were up by an annual 2.5%. Unemployment fell to 9.3%. Gross domestic product expanded by a revised 0.5% in the first quarter. None of the numbers was exactly stellar but all suggested that the Euro zone economy was pulling itself together after many years of struggle.

The European Central Bank president took some of the credit, saying that the bank’s quantitative easing efforts had contributed. He also said that “extraordinary stimulus” of asset purchases – currently running at €60bn a month – must continue. There is a chance that the ECB might moderate its dovish tone after this month’s Governing Council meeting but it sounds as though there will be no wind-down of the QE programme before next year.

In Britain the political and economic tone was decidedly less upbeat. House prices stalled, as did manufacturing and industrial production. The trade deficit widened despite the weaker pound. Retail prices went up by 2.7% (CPI) or 3.5% (RPI) , outstripping a 2.4% increase in average wages and reducing consumer spending power. The first quarter economic expansion was downwardly revised to 0.2%, the smallest among G7 countries.

In the political arena Theresa May’s strong and stable election campaign stumbled. Having begun with Brexit as the main issue it appeared to be ending with social care and national security as the points of contention. From a 20-point lead when the election was called the Conservative party’s advantage in the opinion polls had shrunk to between 12 points (ComRes) and 1 point (Survation) by the week of the general election.

Investors are nervous at the possibility of a parliament in which no party has a working majority. It does not look likely: most polls still indicate a win for the Conservatives. But, with Brexit negotiations due to begin soon after the election, investors would rather see a Tory majority than a hung parliament. So would the pound. It is down by -3% on the month against the euro and it would come under increased pressure if that were to be the outcome.

The money markets have become incredibly difficult to read during 2017, so far, and looking ahead for the rest of the year the picture is very muddled too.
There are so many major world events like Trumps Presidential election and his inability to get any policies and reforms passed without difficulty, the ongoing UK Brexit negotiations, UK and USA interest rate discussions, European and world tensions from IS activity and extensive internal elections across Europe – all of these issues and activities make sensible forecasting very tough as headlines and data are constantly causing changes. We specialise in helping companies to negate FX risk and hedge against these kinds of uncertainties that can cause a negative impact on the bottom line, if not handled and cover is not taken.

If you would like to discuss your options with a ChamberFX specialist, please contact Stephanie Warrington on 01254 356473 or

ChamberFX is a national partnership, procured by British Chambers of Commerce on behalf of the Chamber network at advantageous terms with leading specialists in foreign exchange MoneyCorp.