As Brexit talks continue to have a negative affect on Sterling, those looking to buy currency with Sterling await Theresa May's speech due today. Progress on the Irish border could bring some support the Pound. This Sterling report discusses the factors affecting Sterling at the moment, the table below shows the difference in a number of currencies you could have achieved when buying £200,000.00 during the high and low points during the past 5 months.
Brexit pressure points and fall in UK house prices leave Sterling in the balance
Sterling exchange rates continued its struggle throughout yesterday’s trading as a surprising fall in UK house prices and further criticism from the European Commission cemented the pound’s woes leaving it at pivotal levels of 1.125 against the Euro and 1.37 against the Dollar.
Leading mortgage lender Nationwide reported a fall in average house prices by 0.3% last month, despite the markets forecasting a 0.2% increase.
The release sets the UK housing market at its weakest levels in six months and highlights the current squeeze on household revenues and a weaker economy amidst all this Brexit uncertainty.
This was further compounded by the European commission’s open criticism of PM May’s concession over the rights of EU citizens moving to the UK during the Brexit transition period.
Members of the European parliament, in particular former Belgium Prime Minister Guy Verhofstadt, have snubbed the UK’s lasts proposal, suggesting that there can be no discrimination between the rights of EU citizens arriving during, before and after the transition phase. The push back follows calls from the president of the European council Donald Tusk for the UK to come up with better ideas regarding the problematic Irish border.
This week’s Brexit pressure and yesterday’s disappointing data heightens the uncertainty hanging over sterling and have certainly provided an evident opportunity for those looking to buy pounds with a chance to maximise their returns.
Today’s speech from PM May to reverse the trend for the Pound
Amidst all the so called “Brexit noise” those looking to buy foreign currency with Sterling will have been waiting nervously for the long awaited “5 test” speech from Theresa May due at some point today.
For Sterling to make any real gains, the markets will be holding out for clear solutions to the Irish border.
The question of citizens’ rights and more importantly clarifications on the commitments the UK’s negotiating team is willing to provide to make sure an agreement is met on the transition period by the end of March.
Just how PM May’s view of what kind of relationship the UK is pushing for with the EU, will likely dictate Sterling’s value for the foreseeable future. If May can galvanise investor confidence there is every chance the Pound could drive back towards the 1.15 levels against the Euro. If you are looking to buy foreign currency it may pay to plan around this event. Make sure you notify your account manager so he can get a game plan together.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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