It’s been a positive week overall for GBP, which has seen it make gains against the EUR, USD & AUD amongst others.

The GBP/EUR pairing is now trading at the highest levels seen for many months, providing those clients holding the Pound with some much needed respite.

GBP/USD rates have also seen a steady incline this week, breaking through the key resistance barrier of 1.30.

It was a similar story on GBP/AUD rates which moved back above 1.80 this week, hitting 1.8414 at yesterday’s high.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR3.9%€8,920
GBPUSD3.3%$8,580
GBPAUD3.2%$11,720

What was interesting, was that these gains were a continuation of last week’s spike, which came about despite UK Prime Minister Theresa May losing the now much debated key Brexit vote and only just surviving a vote of no confidence in her leadership.

Sterling Predictions and Bank of England event this week

What is the most likely Brexit outcome for the UK?

In truth, the outcome of Brexit remains uncertain to say the least, with the PM now frantically trying to gain further support ahead of next week’s key second vote on her “Plan B”. As many politicians and economists have pointed out, Plan B looks decidedly like Plan A, although she is seeking to gain further concessions from the EU in regards to the much maligned Backstop agreement with Northern Ireland. Whether she will be able to turnaround such a big loss by next Tuesday’s vote is questionable to say the least but if she fails, then it is likely that all eyes will turn to February when the next instalment of the saga and a prospective 3rd vote is scheduled for.

What is now looking more likely is that we will either leave the single bloc with no-deal come the March 29th deadline, or possibly the more likely outcome, an extension to Article 50 will be granted.

Is this a positive outcome for the Pound? In my opinion it is simply keeping the wolf from the door and whilst it may remove a no-deal scenario in the short-term, it does little to clarify the UK’s final Brexit position.

If this is indeed the final outcome I would expect Sterling to remain handicapped, at least to some extent for the duration of any given extension on Article 50.

It may however also provide some protection for those clients holding Sterling, who could certainly point towards the fact that if last week’s heavy loss in the House of Commons didn’t cause the Pound dip further, then it may be that GBP has found something of a bottom line under the current market conditions.

Personally, I would not be prepared to gamble on a sustained improvement from the current levels but instead see this week’s gains as a silver lining and react accordingly.

UK economic data overview

UK economic data was fairly sparse this week and the same can be said for next week. The key release on Tuesday confirmed that UK Unemployment fell once again, with the official figure of 4% impressive and likely to have helped assist Sterling’s rise.

Looking ahead and next week brings with it the 2nd Brexit vote, which is likely to be investor’s main focus. Beyond this Consume Confidence figures on Thursday and Manufacturing data on Friday may also bring with them some added volatility for the Pound.

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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.