What you need to know.
Why is this election
the most uncertain
in decades?
Why this election
matters more
The UK is experiencing
a significant shift from a
2-party system, consisting
of the Conservatives
and Labour, to a multiparty system.
Outcome 1
What are the potential
outcomes?
Conservative and
Lib Dems Coalition
Outcome 3
Labour coalition
with either the SNP
or the Lib Dems
The changes which markets
are speculating about
These are potential scenarios
based on recent ‘poll-of-polls’
indicating that there will be
another hung parliament
Should you expect
a significant market
reaction?
How previous ‘highly
uncertain’ elections
impacted GBP
UK elections in both
February 1974 and
May 2010 resulted in
hung parliaments.!
February 1974
What market risks are related
to each possible scenario?
Why investors are on high alert
Who are the parties
changing the political
landscape?
Conservatives minority
government
Outcome 2
EU Referendum
(potential ‘Brexit’)
Lengthy
multi-party
negotiations
EU Referendum
(potential ‘Brexit’)
Each scenario is expected to
affect how the government
influences the UK economy
Change in economic
policy, spending
and taxes
Potential for
another
Scottish
Referendum
Between January and March
GBP/USD fluctuated by 10.5%.
May 2010
Between April 26th and
May 18th GBP/USD fell by 8%.
Between May 18th and
August 1st GBP/USD
climbed by 11%.
On May 7th GBP/EUR fell by
almost 5 cents (4.3%) in one day.
SNP
What impact could each
outcome have on GBP?
GBP Depreciates?
GBP Appreciates?
GBP Uncertainty Rises?
Will another Cons/Lib Dems
coalition be seen as ‘business
as usual’ with continued UK
economic growth?
Will FX volatility jump as
markets reassess the outlook
for the UK economy?
Will GBP be subject to further
economic speculation?
How this election may affect
your currency position
Lib Dems
UKIP
Page 1 of 2 pages
A hypothetical guide to how
currency markets could react
to each potential outcome
A multi-party government could
take weeks to form. Could this
leave the pound vulnerable to
speculative trading?
My biggest concern
would be lengthy
multi-party negotiations
after May 7th. In that
scenario, and based
on previous political
experiences, we can
be confident in seeing
aggressive fluctuations
in the pound’s value.
Nawaz Ali, UK Market Analyst
More Information Overleaf
What you need to know.
What are the market predictions this time?
Predictions from leading analysts are divided on where
GBP will be trading by September 2015.
The latest FX forecasts from the experts
GBP/USD Predictions2
1.500
1.600
1.300
1.6000
1.5800
1.5500
HIGH
1.4900
1.4000
APR 2015
LOW
1.3800
JUN 2015
1.3500
SEP 2015
MAR 2016
This is how we are planning to guide you through
1.5645
1.4999
1.5300
HIGH
1.500
1. Extended Opening Hours
On both May 7th and 8th our phone lines will be open
from 7am until 7pm.
2. Breaking News Service
1.400
1.400
What we are doing now to help you
GBP/EUR Predictions2
1.700
1.600
How are we preparing for this critical period?
Over the election period we will keep you updated on
any high-impact market developments via e-mail.
1.3900
1.3118
1.300
1.3113
LOW
1.2783
1.200
APR 2015
JUN 2015
SEP 2015
MAR 2016
3. Credit Facility
Our finance specialists are on standby to assist you with
any questions about your credit facility with us.
4. Risk Management Strategy
Our team has already prepared risk reducing
strategies to share with you.
UK Election & Key Economic Events Calendar
The dates that could have a high impact on currencies
3
One opinion poll had a significant impact on
GBP before the 2014 Scottish Referendum.
These could be the key dates to watch this time.
Televised Election Event
UK Election Update
Poll Results Televised
Expected
Election Event
21
APR
22
APR
23
APR
UK BOE
Meeting
Minutes
24
APR
25
APR
26
APR
Euro Zone
Meeting (Greece)
German IFO
Business Index
Economic Event Risk
UK General Election
Poll Results
Expected
7
MAY
Election Result
Expected
US Interest Rate Decision
US Q1 GDP Result
US Non-farm
Payrolls
German
Industrial Orders
Actions that will help us support you
Understand what payments you need to make or receive
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
APR APR APR APR MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY
Euro Zone Inflation
How could you be preparing for this critical period?
UK BOE
Interest Rate
Decision
UK Q1 GDP Result
Do you have an overview of your future foreign cash flow?
Your Cash Management Platform or your Dedicated Dealer can
help you do this quickly with more confidence.
For further information on how we can support you and develop
a strategy that will help you plan ahead, contact us now:
0800 096 1225
[email protected]
1 Source: Reuters, WUBS. 2 Source: Reuters, WUBS – The Reuters FX Poll is published by Reuters each month. About 50-60 global institutions including leading investment banks contribute with their predictions. 3 Source: Reuters, WUBS.
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2
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