Sterling suffered a slow start to this week’s trading, dropping almost 1 cent from the levels going into the weekend and with a lack of key UK economic data releases this week, Sterling sentiment had been hindered and it seemed that it could be a tough week for the Pound to gain any ground. More on Brexit developments this week from the UK and EU and the boost seen for the Pound. The table below shows the range of exchange rates for a number of currency pairings throughout the past week, and the potential difference in return you could have achieved when selling £200,000.00 during the high and low points.
|Currency Pair||% Change||Difference on £200,000|
However, claims regarding both German and UK political stance surrounding Brexit negotiations yesterday afternoon, saw a spike in GBP/EUR trading with mid-market levels entering the 1.11s.
According to Bloomberg sources, reports suggested that German Chancellor, Angela Merkel would be willing to consider a ‘less detailed’ proposal for the UK’s future economic and trade relationship with the EU post Brexit, which could potentially ease a path for a deal to be finalised before the new November deadline.
From the UK side, there were similar claims that the government would be keen accommodate this change in stance, which would postpone some decisions until after the March 2019 exit day.
However, Sterling’s gains were short lived, and the claims were somewhat rubbished after Reuters subsequently reported that a spokesperson for the German Government suggested that countries position was unchanged and had full support in Chief European Negotiator Michel Barnier.
Earlier in the week Mark Carney announced at a Parliamentary hearing that he was considering an additional extension to his term as Governor of the Bank of England, in order to ensure continuity through the Brexit process.
This could provide confidence in Sterling sentiment, as economists have cited Carney’s reassuring presence as one of the reasons British assets have not sold off as much as expected, following the UK’s decision to leave the European Union 2 years ago.
Carney was expected to step down next summer and has led the Central Bank’s effort to ensure preparation for a post Brexit economy and in a Bloomberg interview back in June, suggested he spends half his time planning for the UK’s departure from the EU.
From a currency perspective, this all emphasises the fragility of Sterling sentiment in response to Brexit related news and therefore the importance in keeping in touch with your account manager in order to capitalise on any favourable market movement in such an uncertain market climate.
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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