Although GDP data for the UK was better than expected yesterday, the gains made for GBP/EUR rates reversed quickly soon after. This just goes to show the volatility of the currency markets today. Historically, economic data would be the main driver of any fluctuations in rates, however it would seem that it is more a case of what positive or negative comments regarding the UK’s departure from the EU will be said next, and by who.
One of Theresa May’s cabinet Ministers David Mundell has spoken out at a hearing to Scottish lawmakers, that “if we are leaving the EU, we are leaving the single market”.
He also told the committee that the UK’s relationship with the EU would not replicate any current models. This statement has caused concern amongst businesses and financial markets, as the implications of cutting access to the single market are completely unknown, and this has caused the Pound to weaken sharply, providing yet another great opportunity for clients selling Euros for Pounds. Theresa May has held a very clear stance throughout the entire process that she wants a bespoke deal to include denying access for EU nationals into the UK, something which is widely regarded across Europe as impossible whilst still retaining access to the single market.
Investors will be keeping a sharp eye on Preliminary Q3 GDP figures followed by October’s Consumer Price Index released on Monday at 11am. As these are both very clear representations of the economy, any change from the previous periods could result in major swings to GBP/EUR rates. A forward contract is one of our options available to you, where, for a small deposit, you can secure the current exchange rate for any time up to 2 years, therefore removing yourselves from the uncertainty caused by fluctuating rates.
Thank you for reading my Euro report this morning, get in touch with our brokers here at currencies.co.uk if you would like to discuss an upcoming currency transfer on 01494 725 353.
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