Yesterday saw the Pound float at the pivotal rate point of 1.15 against the Euro as the gains made on the back of PM Mays speech on Tuesday were put under considerable pressure yesterday as it was the turn of a number of major political figureheads of the Euro zone to make their views heard with regards to the ever nearing Brexit. President of the European commission Jean-Claude Juncker made it clear he would favor equal terms when organising the UKs divorce with the EU.
Guy Verhofstadt, the Eurozones leading negotiator stating the importance of making an example of Britain for other potential trade partners in the future. In his view, punishing the UK for leaving the EU by implementing unhelpful trade restrictions will only derail other ongoing negotiations with global partners.
This could be seen as good news by Sterling holders looking to make a transfer in the near future however it is unclear whether the example to be made of Brexit is to be as idealistic as Mr Verhofstadt has suggested. With May making it clear the UK will no longer adhere to the free movement of people just to remain within the single market, many foreign ministers, in particular from France and Germany are calling for EU negotiators to be ruthless: For the euro zone to maintain its credibility, the offer on the table must be inferior to that of the access currently being offered to its associate members - Placing the UK in a weaker position when negotiating trade agreements than countries like Turkey.
The single currency built up a fair amount of momentum yesterday forcing the pound to retreat as low as 1,149 against the euro. Junckers speech provided our clients repatriating funds back to the UK with a fantastic selling opportunity, granting an extra £1,700 on a 250,000 € transfer if timed correctly. JC Juncker rightly exclaimed powerful speeches do not spark international trade negotiations, putting the ball well and truly in Prime minister Mays court to be decisive ahead of the Supreme court ruling decision next Tuesday.
Although Mays speech helped drive the Pounds value in the eyes of investors short term, her plan for a clear break from the single market still leaves a cloud of uncertainty hovering over the Pound and I can only see more downside risk as a result.
As we have seen since the weekend, the markets are particularly tuned into the constant stream of political jibes from both sides of the Channel which will result in a fair amount of volatility over the next couple of days. I would urge anyone with a Euro requirement to get in touch with their account manager here who can talk you through the process of booking a forward contract, allowing you to fix the current rate, taking any risk out of the transfer.
Although the Euro faced resistance at the lower 1.15 mark yesterday I am not convinced the Pound will hold its ground in the buildup to the supreme court ruling on Tuesday. With the markets having already factored in Theresa Mays Brexit blueprint I am inclined to believe the mounting pressure on the PMs shoulders to take decisive action could drive Sterling as low as 1.10 by this time next week. Meaning it could become quite a lot more expensive to purchase a property abroad in the coming months. As such, Sterling holders may look to act sooner rather than later to make the most of these monthly highs.
On a positive note, as the majority of our clients are people looking to move abroad, we have taken great comfort in PM Mays stance with regards to protecting UK citizens living in the EU. The unofficial response was that the PM may consider unilaterally assuring EU residents rights in the UK as a political gesture to protect the rights of those living abroad. It may be worth keeping an eye on the ECBs interest rate decision and subsequent monetary policy statement this afternoon. Although little changes are expected, both should provide clear insight as to how the Eurozone will adapt to the rocky times ahead.
Clients looking to buy or sell the Euro should stay in touch with their dedicated broker, as a number of potential Brexit outcomes could sway GBP/EUR. Call our trading floor on 01494 725 353 or email me at firstname.lastname@example.org if youd like to discuss a requirement.
Superb service. Fast efficient and friendly staff, getting you the best value for your money.
Very straightforward, no hidden charges together with the best exchange rates. Excellent service. Highly recommended.
They always answer the phone straight away, they are very helpful and always call back. They have the best rates.
Brilliant service. One of the best companies ever dealt with. Had time to talk to me and offer great rates too.
Efficient service as always. Excellent customer service, with dedicated dealers who get to know you. Would not hesitate to recommend.