Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just 1 month affecting Pound Sterling rates when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBPEUR3.20%€7,250
GBPUSD3.00%$8,000
GBPNZD4.50%NZD $6,500
Irish Border Talks Begin

Brexit progress drives Sterling Down

Sterling exchange rates have dropped recently as the built up expectation of a movement forward with the Brexit negotiations failed to meet this view.

EU leaders on Friday have agreed to move forward to the second phase but called for further clarity from the UK about the future relationship it wants. It seems that the vote in Westminster last week which resulted in MP’s having a vote on the final agreement has pushed back progress on these negotiations. This resulted in the market dropping and the Pound falling in value by over 1% against the single currency within a few minutes, highlighting how important it is to keep a close eye on the market over these large events.

Next on the horizon for Brexit negotiations are the trade talks which will be on-going. I expect updates on this topic to be released as closed negotiations continue until the summit in March where they will try to formalise an agreement. Germany's Angela Merkel said it would get "even tougher" moving forward which supports my personal view that the Pound will remain under pressure as these negotiations continue. The rating agency Moody also stated that the breakthrough was positive but more complex talks await. If the UK struggled to get through phase one of talks, trade talks are probably going to be even more problematic, this I expect to continue to put pressure on the Pound moving into 2018.

Bank of England update set to drive markets this week

Next on the economic horizon is a speech from Mark Carney, the Governor of the Bank of England (BOE), on Wednesday. This will probably hint to the latest updates from the BOE interest rate decision last week. This was the first time that all nine members of the Monetary Policy Committee agreed to keep rates on hold for over a year.

The market will be looking out for hints towards future policy into 2018 and their stance on inflation, with costs of goods and services going up due to the weakness of the Pound. Last week there were however highlights of a good impact as a result of the fall in the Pound. UK Manufacturing output over the last year climbed by 3.9% which was attributed to the weak pound.

This contradictory tone from data on the UK Pound will continue to give clients opportunity with a well-timed transfer. Make sure to remain in contact with ourselves for assistance with the potential timing of future transfers.

GDP Figures will drive Sterling over Christmas?

On Friday we have the BOE GDP figures being released. Probably the last major event before the Christmas period when markets generally slow down. With the Bank of England (BOE) only recently raising interest rates and maintaining a cautious stance about the UK economy and the impact from Brexit, this release could set the trend over the Christmas period. Q3 figures are expected at 0.4%, a higher reading would probably result in GBP gains at the end of the week. However if this is missed expect rates to drop off and a potential sell off to start which could run over the festive period.

Thank you for reading today's currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them on 01494 725 353 or email me here.

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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.