With the surprise announcement yesterday from the UK Prime Minister Theresa May that she and her Cabinet have chosen to hold a General Election on June the 8th 2017, it wasn’t long before currency options traders turned their attention to the value of Sterling.
Having been on something of a turbulent ride for the last year or so with the historic Brexit vote, GBP has been losing a lot of value against most other major currencies, however within minutes of the announcement of a General Election in the United Kingdom the value of GBP immediately strengthened and has continued to do so ever since that announcement.
One of the benefits of trading currencies these days is that anyone can do so, for all they need to do is to find a licensed and established Broker of which there are many offering both online and mobile trading platforms, and then any two currencies can be paired together and a trader simply then has to decide which currency is likely to increase in value or decrease in value against the other currency and then place their respective trades.
It is not even a case that a trader will need to buy and then sell any currencies to be able to make profits from the volatility of any currencies, for the new breed of Currency Brokers offer anyone the opportunity of simply placing what is essentially a bet that one currency, over any given time period, will rise or fall in regards to the value of another currency.
British based betting sites have already opened up betting markets on the result of the General Election in the UK and many have firmly pencilled in Theresa May’s Conservative Party as the red hot favourite with odds as low as 12 to 1 on, meaning a $12 wager will return just a $1 profit if, as is expected, the Conservatives do win.
The Labour Party are currently on offer as the winner of that election at odds of 10 to 1 against and as such a $1 wager on that political party winning will return a $10 profit and your initial $1 wager paid back out to you.
There are of course going to be lots of factors that will determine whether GBP continues to increase in value against most other currencies, however many observers are now speculating that the value of GBP is likely to go on an upward curve, certainly before the election and the two currencies that are most likely to be decreasing in value against the Pound are the Euro and the US Dollar.
What is also expected once the result of that General Election is known is that the Pound will once again become volatile against the Euro as the Brexit deal is worked out with the EU, and whether Theresa May is able to negotiate a fair and very reasonable set of trade deals with the EU in the run up to Brexit, however there are no guarantees that is going to be something she will be able to do.