More problems for UK Prime Minister Theresa May

In recent weeks Sterling exchange rates have received a well needed boost. This is due to the High Court ruling that Theresa May does not have the power to invoke Article 50 on her own. She is set to appeal the decision in the Supreme Court early next month. Regardless of the outcome news has emerged yesterday that lawyers will argue that leaving the European Union does not mean leaving the European Economic Area, in other words the single market.

Lawyers are suggesting to leave the single market Article 127 needs to be triggered, and Article 127 is not automatically triggered alongside Article 50.

Currently remain MPs want to remain part of the single market as this allows tariff free movements of goods, services and money. However EU leaders have stated to remain part of the single market the UK must continue to accept free movement of people and this is where the problem lies.

One of the main reasons why the British public voted to leave the EU was to take back control of the UK borders. If this does not occur then the British public will feel that Theresa May has not delivered on her promises.

How is the Brexit impacting Sterling exchange rates?

When the UK public voted out of the EU the initial reaction was that the Pound would suffer due to departing the signal market. Overtime the Pound fell to 31 year low against the US Dollar and 5 year lows against the Euro.

Since the High Court ruling the Pound has made back some of the losses (5 cents against the Dollar and 7 cents against the Euro), and I believe the Pound will remain buoyant or continue to gain momentum the longer Brexit negotiations go on.

The outcome of this story has the potential to change on a daily basis. If you are transferring Sterling into a foreign currency in the upcoming months I would recommend getting in touch with your account manager to make them aware of your requirements and they will keep you informed of any developments.

Clients looking to buy foreign currency may be prudent in doing so ahead of the Supreme Court hearing next week. The Pound could lose further ground if Theresa May wins the challenge. Call us on 01494 725 353 or email drl@currencies.co.uk to retrieve a quote.

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