HiFX Offers Currency Predictions for General Election Result

1st May 2015

With the General Election just around the corner, of which the outcome is far from clear, one would expect volatility in the FX markets. This though, rather perversely, is not the case. It is difficult for currency traders to trade the outcome, as it still remains too close to call.

However, there will be volatility immediately following the election, depending on the result, with a potential 3% move either way for sterling. Chris Towner, managing director of FX advisory services at foreign currency specialists HiFX, said: "Stepping back from all the polls and just looking at the impact of some simple outcomes on sterling, the Conservatives are seen as the party that is best at handling the economy, controlling the deficit and therefore giving stability to sterling. On the other hand, Labour are seen as the party that has the potential to spend more and increase the budget deficit and this is expected to weigh on the pound.

"Overall we would expect the currency markets only to become volatile once the results start coming out and expect a move in sterling of up to 3% either way. The other issue is how quickly it will take for a Government to be formed and whether this would be a majority or minority Government. Needless to say, a majority Government adds stability to sterling.

“All in all, a Conservative led Government within a coalition could push sterling against the US dollar and the euro up around 2%, whereas a Labour-led result would knock a couple of percentage points off the value of sterling.

“Although we expect volatility to rise over the election period, once all has settled and the Government has been formed, then the FX market is expected to revert quickly to focussing on the economy."

This article is from HiFX

HiFX is the UK's premier provider of foreign exchange and cash deposit services. Established in 1998, HiFX launched the first online international money transfer service with live exchange rates and no hidden fees. Working with over 80,000 private individuals each year and approximately 6000 corporate clients worldwide managing their foreign exchange and currency needs, HiFX offers both companies and private individuals significantly better exchange rates and exceptional service.

The breadth of activity HiFX helps its clients with is far reaching. For private individuals activity typically includes overseas property acquisition, migration overseas, salary transfers, international pension transfers and high value asset purchase. For corporate clients it is an effective way to pay overseas suppliers and staff, receive international payments, settle invoices and conduct business abroad. Last year HiFX advised on and executed over £9 billion in foreign exchange and has in excess of £2 billion placed on the Money Markets on behalf of our commercial customers.

HiFX systems work to 99.999% uptime standards, and just like the worlds banks are independently tested. HiFX also uses independently verified online security with the highest level of VeriSign certification. HiFX is the service provider for the Post Office's 'International Payments Service'. If you send money overseas through the Post Office, you will be talking to HiFX.

HiFX standing in the market is highlighted by the number of visitors to its website. In 2010, it had 4.2 million visitors and 1.3 million unique users to its website.