We have already seen a lot of movement during this month for sterling exchange rates, especially in the run up to and post-election from last week.
Sterling hit its highest level to buy euros since 2016 as the Tories won with a majority. However, since then the pound has struggled to hold on to these gains and is now trading at rates below the pre-election levels.
On Friday, MPs voted in favour to back Boris Johnson’s Brexit bill with a vote of 358 to 234. This will also need to be reviewed in both the House of Commons as well as the House of Lords.
The bill also proposes to ban an extension past 2020. Johnson’s argument is that this will allow the UK to move things forward. The Prime Minister was quoted saying, ‘this is the time when we move on and discard the old labels of leave and remain’. One key risk for the UK is that if the UK cannot agree a deal with the EU it could risk crashing out and this could be one of the reasons for sterling’s wobbles during last week.
The new Bank of England governor was also announced on Friday and will be replacing Mark Carney as of 16th March 2020. Andrew Bailey is currently the head of the FCA and will serve a full 8 years at the helm. Bailey brings with him over 30 years of experience at the Bank of England and worked as the deputy governor of the central bank between 2013-2016.
The political tensions in Catalonia has once again hit the headlines with protestors causing chaos in Barcelona last week. Five people were arrested as tensions heightened owing to the issue of jailing nine Catalan separatist leaders two year ago.
France is also suffering from ongoing protests in Paris and other regions across the country. The main issue surrounds the pension system and the reforms are an attempt to see the retirement age move from 62 to 64. Clearly this is causing problems in France and this is why the demonstrations may continue during the festive period.
On Friday afternoon the US published lower than expected GDP figures which came out at 1.7% compared to the expectation of 1.8%. The US dollar weakened off the back of the news against the pound but the gains for sterling were rather limited.
As we head into Christmas week the US will announce Durable Goods order for November. Expectations are for 1.9% so anything different could cause movement for the US dollar.
The ongoing political issues in the US continue to rumble on. Following the impeachment of US President Donald Trump, he has requested a trial in the Senate as soon as possible. The Democrats who originally brought the charges have delayed the proceedings but as the Senate is mainly controlled by the Republicans with Trump likely to be acquitted.
As always, I got an excellent rate. Tom is always helpful and the whole process is extremely quick, efficient and simple.
Tom helped us so much explained every thing and got us a better rate to buy our home in Spain, when we had to pay for furniture went back again and he sorted a rate out for me.
Brilliant service, genuine advice and rapid transfer of money to our French bank account. Tom Holian seems like a friend although we’ve never met!