Sterling appears to have bounced back from the slump experienced at the end of October, which saw the currency down against most major currencies.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The GBP/EUR pairing has returned to the best levels seen since May, with current mid-market levels testing 1.15.
Questions are now being asked about whether this run of form can be maintained, or if this is a momentary blip in a typically volatile market climate.
Similarly, GBP has also seen considerable movement against USD, with gains of over 4 cents since the end of last month and current mid-market levels are back around the familiar 1.30 resistance point.
In monetary terms, this movement means that a well-timed transfer could have achieved approximately $10,000 more on a £200,000 transfer, in comparison to the lowest point.
Sterling’s recent gains against EUR and USD have been largely influenced by suggestions that a potential Brexit deal can be finalised before the end of the year, despite the fact that contention still remains over a solution for the Irish border and the UK’s relationship with the customs union following the March exit date.
As outlined in the EU Withdrawal Act 2018, the 21st January is the next key date in the Brexit calendar that clients with an upcoming transfer involving GBP should be planning towards.
The Act highlights that the Government must announce before this date whether or not they can reach an agreement with the EU surrounding the future relationship between both parties post-Brexit. If the deadline is not met, the Government will have 5 days to make a statement outlining how it wishes to proceed, and make consequent arrangements for the motion to be passed through Parliament.
Unless a deal, or no-deal scenario is announced before this date, there is argument to suggest that markets will continue to remain volatile in to the new year.
In addition to the current political influences on sterling’s currency markets, there are key economic releases this week that could influence market movement.
On Tuesday, average earnings data is to be announced, followed by inflation data on Wednesday, in the form of the Consumer Price Index (CPI). Both of these are expected to show improvements from the previous figures released.
Positive results in these sets of data typically improve market sentiment, so clients anticipating transfers involving GBP should keep in contact with their account manager in order to capitalise on favourable movement.
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