The GBP has been relatively muted against most major currencies following MP's return to Parliament after the shortened Easter recess, with little more than 1% movement against the EUR and USD interbank rate.
|Currency Pair||% Change (Month)||Difference on £200,000|
Since the deadlock in Parliament has left little indication that a deal will be passed and with the extension to the Brexit deadline from 12th April to the 31st October, Prime Minister Theresa May has been under increasing pressure to resign or set a date out for her departure, as she had previously stated she will stand down after she has delivered the ‘first phase’ for Brexit and formally cut ties from the EU.
Recent reports from foreign exchange analysts at Danske Bank have suggested that the increased and extended political uncertainty within the UK has justified the leading lender to lower their forecast for sterling markets, which previously expected that GBPEUR interbank levels could exceed 1.20 before the end of the year.
However, there have conflicting reports from analysts that this outlook could change, suggesting that the current ‘undervaluation’ of the GBP is becoming increasingly attractive to buyers, which could spell optimism in the short-medium term for sterling.
On Thursday, voters will head to the polling stations to vote for their local councillor, with 8,425 seats up for grabs in a total of 248 councils.
Over the weekend, there have been growing reports that the growing discontent towards the ruling Conservative Party could see a net loss over 1000 seats and labour gains by as many as 800, which could rattle sterling markets.
Market sentiment can be influenced by rumour in addition to fact, so if polls gauge any negativity leading up to the votes, sterling markets could change as a result.
The Bank of England are set to release their latest interest rate decision on Thursday and any change to the current level of 0.75% could influence sterling market movement.
It’s been widely publicised that low inflation and Brexit uncertainty has provided little reason for the Central Bank to alter the current level, but the following statement from the bank’s Governor Mark Carney, could provide an insight into their forecast for the coming months, which could influence market movement.
It could therefore be a busy week for sterling currency markets, so clients anticipating a transfer involving the GBP can keep up to date with the latest information by contacting their account manager here at Foreign Currency Direct.
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