A key topic of conversation during Brexit talks is now the issue of the Irish border, which needs to be resolved before the withdrawal agreement is reached. Considering the chance of no agreement being reached before the EU Summit we may see EU weakness off the back of negative commentary surrounding the update. The table below shows the difference in a number of currencies you could have achieved when buying £200,000.00 during the high and low points during the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.80%€4,896
GBPUSD4.31%$13,680
GBPCAD4.21%CAD $17,760

Irish Border to drive sterling exchange rates

Brexit has been a hot topic within the currency markets over the last 2 years and arguably the most important negotiations are yet to have taken place. In the upcoming weeks UK Prime Minister Theresa May will release a white paper outlining the UKs position and this is set to be released before the EU summit at the end of June.

Last week Irish Prime Minister Leo Varadker at a lecture in the Belgain city of Leuven, stated that progress on the Irish border has to be made at the summit in June and went on to say that “without the Irish border resolved there can be no withdrawal agreement”. The problem the Prime Minister has is that she doesn’t want a hard border separating Northern Ireland and Ireland but at the same time she does not want to break up the UK by allowing Northern Ireland to remain part of the custom union.

BoE Members Speaking this week

With the PM stuck between a rock and a hard place, something has to give but unfortunately I don’t believe both parties will come to an agreement before or at the EU summit. Therefore I expect the commentary to be extremely negative which will put major pressure on the value of sterling. Therefore clients that are buying property and have made offers and are waiting to pay the full balance, it may be sensible to secure the full balance upfront.

In other news Britain will have an influence on the EU’s £1 trillion budget up to 2027, as European countries disagreed with Brussels yesterday and invited UK officials to future negotiations. Reports are suggesting that the European Commission is furious with the EU council member states as the Commission believe the UK will use the budget discussions to join certain programmes such as Science and Research after leaving the EU. 

UK economic to look for this week

It’s a quiet week for UK economic data. The key releases to look out for are Mortgage approvals Thursday morning at 9.30am Thursday and Markit manufacturing numbers Friday at 9.30am. Mortgage approvals gives a good gauge of the health of the property market. The predictions is for a slight improvement from last month, therefore this could give the pound a small boost. However Markit manufacturing numbers are set to show a slight contraction therefore clients buying a foreign currency this week may wish to target Thursday morning.

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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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.