Brexit negotiations are set to continue with the Irish border a key topic of conversation, this is likely to continue having an affect on Sterling rates. The table below shows the difference in a number of currencies you could have achieved when buying £200,000.00 during the high and low points of the last 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR3.01%€6,700 EUR
GBPUSD3.41%$9,380 USD
GBPAUD5.11%$18,000 AUD

Sterling rallies across the board

In recent weeks the pound has had a good run against most major currencies with GBPEUR breaching 1.14, GBPUSD 1.40 and GBPAUD reaching as high as 1.85. The good run in fortune comes from the UK securing a transitional agreement with the EU, the Bank of England hinting that an interest rate hike is likely in May and average earnings numbers outpacing inflation, which has been a key concern for the Bank of England over the last couple of years. For clients that are buying a foreign currency in the upcoming quarter, there is a strong argument to suggest buying your currency upfront may be wise.

Two main components likely make up these gains

A fresh round of Brexit negotiations to begin

Brexit negotiations will continue to steal the headlines and arguable the most challenging issues are still to be decided. At present the UK and EU cannot come to an agreement in regards to the Irish Border. UK Prime Minister Theresa May has made it clear that the UK will be leaving the customs union, which means that Northern Ireland will be leaving also. However, the Government does not want a hard border separating Northern and the Republic of Ireland and this is the problem as the EU are stating you have one or the other. In addition, the all-important trade negotiations are set to start and should be concluded by the back end of the summer. Past history tells us when the UK and EU start to negotiate a new part of Brexit the early negotiations are.

I expect the commentary coming from these negotiations to be negative and therefore could put pressure on the pound in the upcoming months.

UK economic data to look out for this week

For clients that are converting sterling into a foreign currency or a foreign currency into sterling this week, the key data releases to look out for are Markit Manufacturing numbers this morning at 9.30am, PMI construction data Wednesday morning and Markit Services data Thursday morning. All three releases are predicted to come out worse than last months figure therefore the pound may lose some value against some of the major currencies throughout the week.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.