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
GBPEUR2.4%€5,560
GBPUSD2.4%$6,140
GBPAUD4.2%AUD $15,130

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.

PM Boris Johnson to provide Brexit legal text to the EU

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.

UK GDP figures to impact sterling exchange rates this morning

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.

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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.