With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in a number of currencies you would have achieved when buying £200,000.00 during the high and low points during trading on Wednesday.

Currency Pair% ChangeDifference on £200,000
GBPEUR0.6353%€1420
GBPUSD0.6834%$1800
GBPAUD1.0063%AUD $3500
Angela Merkel: Migration Deal ‘not the end of the road’

EU Summit could cause Sterling strength

Sterling value is predominantly being influenced by the situation on Brexit. Phase two of Brexit negotiations is due to commence shortly, if all goes to plan tomorrow and how it progresses will have ramifications for the pound. GBP/EUR hit 1.15 on Friday following the announced agreement on Irish borders.

I was of the opinion this could be the start of some more significant gains for the pound, but comments from Donald Tusk caused Sterling to fall in value. Phase two negotiations could prove problematic if Brussels decide to make an example of the UK in order to warn off other regions from leaving the EU. I think this has been witnessed to some extent in phase one.

The UK's Brexit secretary, David Davis has not helped matters. He stated over the weekend that the guarantees on the Northern Ireland border were not legally binding and caused Sterling to drop in value against the majority of major currencies. Not too clever considering his position and influence. He has however vowed to convert the Brexit deal into legally binding text.

Brussels are clearly not happy with Davis' comments and it does not bode well for negotiations moving forward.

May travels to Brussels following Commons defeated

A rebellion by eleven Conservative MPs saw Theresa May beaten by four votes on a key amendment to the EU withdrawal bill.

The change means May is unable to guarantee to the EU that she can implement the exit terms they agree. Seriously undermining her position. This also weakens her position in terms of credibility due to the in party fighting. There is now an increased sense of political uncertainty. Uncertainty is one thing the markets do not react well too.

I am of the opinion this is a major step backwards in the Brexit process and will elongate an already lengthy negotiation process which could hurt Sterling long term.

Retail Sales could create volatility

Retail Sales Data and MPC vote could influence Sterling

Retail sales data is released this morning and could cause a change in the Pound's value. It is difficult to analyse as Christmas spending does warp results. This will be interesting to see due to recent inflation and average wage growth.

Later in the day we have the Bank of England (BoE) interest rate decision. I would be very surprised to see any change in rates due to recent economic data and the uncertainty surrounding Brexit. What could be interesting however is the Monetary Policy Committee (MPC) vote and the BoE minutes.

Although I expect there to be no change in the interest rate vote, how the MPC voted could influence investors if it differs from the previous month. The BoE minutes could give an indication to monetary policy moving forward can cause movement for the pound. Feel free to get in touch on 01494 725 353 or email me here if you have any queries regarding an upcoming transfer.

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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.