Euro plummets against the pound to almost two-year low – what it means for you
Looking at it from a more day-to-day angle, it’s good news if you have a holiday booked in the euro area, as your pound will go further when converted to the single currency
The value of the euro has dropped after French President Emmanuel Macron called a snap General Election.
The currency has dropped by 0.4% against the pound to 84p today (June 10). The drop sees the currency fall to a one month low against the dollar hovering around 1.0796, but a two-year low against the pound. The drop comes as political uncertainty spreads across Europe. Eurosceptic nationalists made the biggest gains in European Parliament elections over the weekend.
The snap French election was called on June 30, three years before Macron’s presidency ends, after the far-right party the National Rally gained more seats in the European Parliament elections. German Chancellor Olaf Scholz’s SPD party was also hit with its worst-ever results in a European election, as it came third behind far-right Alternative for Germany (AfD).
As reported in The Guardian, market analysts at Deutsche Bank are predicting EU policy will shift after the election results over the weekend. The group said: “While the elections did not bring a seismic shock to EU-level politics, they are still likely to shift the direction of travel for policy over the next five years. The biggest impact of the election result could be at a national level with President Macron announcing the dissolution of the French parliament after the defeat of his Renaissance party.”
The move has caused the London and Paris stock exchange to drop this morning. Russ Mould, AJ Bell investment director, said the EU election results introduce “a big dose of uncertainty”. He said: “Financial stocks were among the worst performers in London as investors digested the news. Also affecting sentiment were Friday’s better-than-expected US jobs numbers which push back against the narrative that rate cuts are imminent.”
However, looking at it from a more day-to-day angle, it’s good news if you have a holiday booked in the euro area, as your pound will go further when converted to the single currency. So if you are jetting away this summer, you may want to consider getting your spending money now whilst there is a small dip.
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