Unsurprisingly the Brexit negotiations are the focus currently, and are expected to be for the coming weeks. This update discusses the current situation with talks and also looks at factors that could affect GBP exchange rates this week. The table below shows the market movements for a number of currency pairings during the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.8%€6,500
GBPUSD3.50%$9,500
GBPAUD4.75%AUD $17,000
Pound’s recent surge against the Euro, US Dollar and Canadian Dollar

Sterling on the rally?

Sterling exchange rates have climbed recently reaching new highs. GBPEUR levels are now near a 5 month high and GBPUSD rates at the end of last week reached a near year high. A majority of these gains have come from an increased likelihood that the Brexit negotiations, which are set to conclude in less than a week, could be productive. Members of the EU Parliament now put the possibility of a Brexit deal next week at 50/50 and the Republic of Ireland’s foreign minister suggested they were very close to an agreement. These are the most recent updates as of this morning and resulted in strength for the Pound yesterday with GBPEUR rates climbing over 1%. This gain alone gave clients yesterday €2,000 more on a £200,000 transfer in the space of 90 minutes, highlighting how important it is to keep in close contact with your broker.

Over the next 10 days the Brexit negotiations should be keenly watched. If they move forward and conclude with a solution expect GBP rates to climb, however if they fail again expect rates to drop significantly. What I would highlight is that many believe rates will either climb maybe 1 ½ cents higher against the euro or indeed maybe drop by upwards of 3 cents. Something to consider when making a decision on the strategy you take over this period.

UK data continues to show gains

Economic data in the UK continues to show improvements. UK manufacturing output hit a four year high in November and only last week all the major UK banks passed the Bank of England’s bi-annual stress tests. Furthermore Construction data yesterday also showed an improvement, growing at its fastest pace in five months.

This morning we have Services data for the UK which is expected to show a contraction. Friday is the busiest day for the UK with industrial productivity, trade balance figures and the latest GDP figures. Personally I see these very much being overshadowed by continual speculation about the pending Brexit conference so make sure to keep an active eye on market or register your interest for updates if you are in the market.

For further information on how upcoming events could affect your currency transfer call our trading floor on 01494 725 353 or email me directly at hse@currencies.co.uk.

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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.