The Pound has struggled to retain its value this week, after an impressive run against the EUR & USD towards the latter part of last week. Brexit continues to be the reason for Sterling weakness, the GBP report below covers that latest updates and the upcoming economic data releases for this week. We've shown in the table the range of exchange rates for a number of currencies during the past month, and the difference in return when selling £200,000.00 during the high and low points of that period.

Currency Pair% ChangeDifference on £200,000
GBPCAD1.7%CAD $5,720

GBP/EUR rates fell by over a cent, whilst Cable rates retracted by almost two cents. The is not the first time the Pound has threatened to show a turn of foot, only to leave those clients holding Sterling disappointed once again.

The on-going fallout from a complete stagnation in Brexit negotiations continues to put a stranglehold on any major advance for Sterling, which has been unable to sustain any improvement of note against the majority of major currencies over the past few months.

UK Prime Minister Theresa May remains steadfast in her commitment to her current Brexit strategy but is her position becoming untenable?

It is no coincidence in my opinion that two of her former cabinet ministers have released separate reports this week, condemning the PM’s current Brexit approach. Former Foreign Secretary Boris Johnson was particularly critical, claiming the current plan would leave the UK with “didly squat” post Brexit. Whilst many may not be too perturbed by his opinion, it was compounded by the UK’s former Brexit negotiator David Davis, who said he would also be voting against the current proposal.

On a lower yet mentionable note, yesterday the UK also saw it highest number of covid-19 cases 6,634 to be precise with 40 people dying within 28 days

EU Commissioner Michel Barnier reportedly against Chequers proposal

Reports yesterday also claimed that EU Commissioner Michel Barnier was against the current Chequers plan and wanted the UK to adopt a different approach, before the EUR would offer us a deal.

All in all, it has not been a particularly good week for the PM and the Pound has suffered as a result of the negative media reports. Sterling threatened to make inroads against both the EUR & USD last week, when it seemed as though the EU were open to offering the UK a deal but with no details given beyond this, the current developments are hardly a surprise.

It seems as though every time we see a forward step, it is met by a wave of negativity and with the media driving this negative feeling, confidence in the Pound remains low. The current odds of a no-Brexit deal currently stand at 25% according to Reuters, so there is a very real risk that a del will not be reached.

One potentially positive development for the UK economy, was comments made by Bank of England (BoE) Governor Mark Carney, who claimed he would be prepared to stay on as Governor if it would help the UK Government “smooth” the Brexit transition.

Despite this development I would still be erring on the side of caution and clients may wish to take advantage if they do see a spike in Sterling’s value, as we did last week.

Looking at the economic data this week and Manufacturing figures released yesterday came out worse than expected at 52.9. This morning we have the releases of the latest Construction PMI data and with the markets anticipating a figure lower than last month, the Pound could struggle to recover its early week losses.

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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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.