The pound received a welcome boost during yesterday’s trading following reports that the EU are considering offering an ‘all-UK backstop’ offer over the Irish border issue to Theresa May. This would mean that Northern Ireland and the UK mainland would remain in the EU customs area during the Brexit transition period, which could also be extended to the end of 2021. This news has helped the pound recover from the damage taken at the beginning of the week and the spike could offer some good opportunities for euro buyers.
|Currency Pair||% Change in 30 days||Difference on £200,000|
Theresa May had said earlier this week that 95% of the Brexit deal is done and that the Irish border issue remained the biggest stumbling block, so if these reports are true then a Brexit deal could be closer than many had thought, which could see the pound benefit greatly.
Having said this we are not out of the woods yet and it is believed that the EU still want a ‘Northern Ireland-only’ backstop agreement that is a fall back in case a UK wide deal can’t be reached. This news however is certainly a life-line for Theresa May and the pound, and could result in claims that her leadership is under attack being quashed. In fact, a spokesperson speaking on behalf of Mrs May stated that the PM is focused only on getting a deal completed, and that she is confident on securing a deal all MPs will be able to support, when asked if May was concerned about a vote of no confidence yesterday morning.
Theresa May could face scrutiny from her party today when she addresses the 1922 committee of backbenchers in Parliament, she will be looking to calm nerves over her Brexit strategy. She could face some tough questioning here and the fallout is likely to impact the pound, particularly if it looks as though her leadership will be pulled into further doubt.
Although there is no firm date set for Theresa May’s next meeting in Brussels, London Mayor Sadiq Khan is set to meet Michel Barnier on Friday this week, and his comments in the run up to the meeting suggest that he could be looking to throw a spanner in the works of the Brexit negotiations so far.
He looks set to tell Barnier that Labour will oppose the ‘bad Brexit deal’ that they feel is emerging from current negotiations and that there is a need for closer economic ties after Brexit. Keep an eye out for any fall out from their meeting on Friday as there is the potential that this could impact on the value of the pound.
Looking further afield, although Brexit and trade talks with the EU are still at an impasse, there seems to be more positivity surrounding a future trade deal with the US post-Brexit, which could see the pound benefit in the long run.
International Trade Secretary Liam Fox is currently in New York and has stated that he believes that Trump is keen to do a deal, and that our longstanding ‘special’ bond should help talks progress. That being said however, Trump has not been the easiest man to agree a trade deal with when you look at the disputes with China and the hurdles over agreeing a renewed NAFTA (North American Free Trade Agreement) deal, so this may not be as easy as Mr Fox predicts.
With little economic data to be released from the UK for the remainder of this week, politics and Brexit developments look set to be the key drivers on sterling exchange rates, so it is vitally important to keep in contact with your account manager here to keep up to speed with all the latest news and how this could affect your currency transfer.
It was efficient, felt very secure with the checks made along the line and a very good rate of exchange.
Excellent service. Contacted in the morning transferred funds. My bank in Spain received money the following morning. Brilliant.
We always use foreign currency direct. Completely happy with the service, fast and friendly.
Very good. Very efficient. Excellent rate.