The pound fell against the euro yesterday, with GBP/EUR interbank exchange rates falling into the 1.15’s for the first time since the end of April.
|Currency Pair||% Change (Month)||Difference on £200,000|
One of the factors behind sterling’s recent strength, which saw the GBP/EUR interbank rate reach 2 year highs of 1.17997 on Sunday evening, was due to hopes that cross party talks between the Conservative and Labour Party were going smoothly, in an effort to break the current deadlock within the UK government on Brexit. However rates fell across the board yesterday afternoon after Labour leader Jeremy Corbyn announced that Theresa May had made little effort to join forces with the Labour Party, prompting fears that the UK isn’t any further along with Brexit negotiations.
Corbyn stated that “so far there has been no big offer and the red lines are still in place” and went on to say “it’s actually quite difficult negotiating with a disintegrating government, with cabinet ministers jockeying for succession rather than working for an agreement."
This announcement did little to ease investor confidence that the UK is any closer to leaving the EU. With less than 2 weeks until the UK is due to vote in the European elections, and following from the confirmation from Senior Minister David Lidington earlier this week that the UK would now need to take part in these Elections, the next 2 weeks could be particularly volatile for sterling exchange rates. Historically political events such as general elections have the potential to move exchange rates considerably due to the uncertainty surrounding them, therefore clients with a pending currency transfer involving pounds could benefit from detailing their requirements to their account manager here so that we can alert you of any spikes in your favour.
There may be an opportunity for sterling to regain some of this week’s losses this morning when Gross Domestic Product figures for the first quarter of this year will be released at 9.30am. Expectation is for growth to increase from 1.4% to 1.8% year on year, and from 0.2% to 0.5% quarter on quarter. If these figures are released lower than expectation, we could see sterling fall against its major currency counterparts, however the pound could rally if the release is positive.
We are a real estate company based in Spain and have been recommending Foreign Currency Direct to our clients for the last three years. Prior to this we used the services of several currency exchange companies and in each case found them to be less than perfect with regard to their customer service and efficiency.
It was therefore extremely refreshing to finally find a company that were prepared to go the extra mile for their clients. We have always found Amelia and her team to be extremely efficient not only in our dealings with them but based on the feedback from our clients.
The service they provide to their clients easily surpasses those of other companies and we highly recommend them.