The pound has received a welcome boost over the last week due to positive commentary surrounding Brexit talks, and the UK seemingly edging closer to securing a deal with the EU, which pushed the GBP/EUR exchange rate to hit a 5 month high yesterday.

Over the last week, a £200,000 currency purchase has become €5,650 or $7,900 less expensive if timed now compared to the lows during this period, and highlights just how important it is to be in close contact with a broker to help you to capitalise on spikes as they happen.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR2.5%€5,650 EUR
GBPUSD4.3%$10,980 USD
GBPCAD3.7%$12,270 CAD
The key reason for Sterling’s current vulnerability however is Brexit. If there is one thing investors do not react well to it is uncertainty and at present it is extremely difficult to call whether or not a deal is going to come to fruition.

It was announced yesterday that a senior member of the Democratic Union Party (DUP), Jeffrey Donaldson, tweeted to say “looks like we’re heading for no deal”, which caused concern amongst investors as Theresa May will ultimately rely on the support from Jeffrey Donaldson along with 9 other members of the DUP in order to get a Brexit deal passed by Parliament.

However, following from a Cabinet meeting also during yesterday afternoon, Brexit Secretary Dominic Raab was asked if the meeting should get a thumbs up or thumbs down, he responded with “thumbs up”.

These contradictory comments caused swings on sterling’s value throughout the course of the afternoon, however hit a 5 month high against the euro after Raab’s comments, and just demonstrates the volatility sterling is experiencing when political figureheads comment on Brexit progress.

This volatility is set to continue for the foreseeable future, after Theresa May’s spokesperson commented to say that more time was needed to resolve the Irish Border dispute, which is the main issue left for the UK and EU to agree on.

GDP, Manufacturing and Industrial figures could impact Sterling rates on Friday

Economic data from the UK is relatively light for this week until Friday morning when preliminary Gross Domestic Product (GDP) figures for the third quarter of this year, along with September’s figures, will be released. All are expected to improve from the previous readings.

Manufacturing and Industrial Production figures for September will also be released and could result in a mixed overview for the UK. Therefore, clients wishing to purchase currency with Pounds could benefit from getting in touch ahead of these releases to capitalise on sterling’s recent gains, in case the data disappoints, or if further negative comments are made regarding a no deal Brexit in the coming days.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.