Just two weeks before the 1 year anniversary of the EU Referendum vote Brits went to the polls once again yesterday. At the time of writing the last few seats are being counted but it has been confirmed no one party has won a majority and therefore we are faced with a hung Parliament.
With Brexit negotiations supposed to start this month we now have fresh questions over not only who will be leading the country through these negotiations but also if and when the Brexit talks will begin. This uncertainty is likely to weigh on the Pound until we get some certainty.
So, if you have a transfer pending it is worth speaking with us here at Foreign Currency Direct to discuss your currency needs and the options open to you.
The table below shows movement for a number of currency pairs during the last 24 hours:
|Currency Pair||% Change||Difference on £200,000|
With the result still to be finalised it appears Sterling exchange rates will continue to react to the ongoing news for the rest of today and more than likely into next week.
We saw a hung Parliament in 2010 and the conclusion of this was a Conservative Liberal Democrat coalition, a process that took 5 days to conclude. However, this time around it is likely to be far more complex with many parties already having ruled out forming coalitions during their campaigns and then there is the added complication of the backdrop of Brexit.
It is now expected that all the major political parties will be entering into discussions and negotiations in order to try and form a coalition.
This is likely to mean over the coming days and weeks until we have a clear outcome, that rumours and comments from key political figures will be the main influencer of Sterling’s value. This uncertainty and unpredictability could result in a very volatile period.
Theresa May could try and form a minority government getting support on an issue by issue basis but this could hamper her during Brexit negotiations. Labour leader has already called for Theresa May to step down but the rumours are Mrs May is currently attempting to form a government so she can continue with her Brexit mandate.
All in all, this uncertainty does not bode well for the Pound and is expected to weigh on Sterling exchange rates until we have some certainty.
Whilst a weaker Pound is excellent news for clients and business buying Sterling, overall a weaker Pound is reflective of a weaker UK economy. What must be in Great Britain’s ultimate interest is a strong economy creating jobs and also providing people with the tools and opportunities to feel like they matter and are valued members of society.
If you have a transfer involving the Pound the roller-coaster that begun in early 2016 is far from over and this latest news is but one more twist and turn on what we know is going to be a long and winding road.
Today there is a raft of data set to be released including Consumer Inflation expectations, Industrial and Manufacturing Production data and Trade Balance Figures. On a normal trading day this economic data would be closely watched, but today it is unlikely to be much of a market mover but are set to be released at 09:30 am.
Next week is a whole host of UK data including the latest interest rate decision, Retail Sales figures, Unemployment data and the latest Inflation numbers which will continue to paint a picture of a post EU referendum British economy. With so much economic data and the fallout from the election, next week will continue to be volatile.
So, if you need to make a currency transfer regardless of whether it is imminent or scheduled for later in the year then speak to us so we can help you make an informed decision about when to transfer your currency.
For more information on how future data releases could affect your currency exchange call our trading floor on 01494 725 353 or email me here.