It has been a fairly flat start to the month for Sterling exchange rates, as modest improvements in the uk manufacturing sector did very little to rekindle investor appetite in the Pound. Indeed, despite an uptick in output from 54.3 to 54.4 in June, optimism in the sector, according to yesterday’s IHS release, is at the lowest level we have seen so far in 2018 with the potential rise in operational costs and increasing threat of trade tariffs the main concern for factory owners. The Sterling report below discusses future for the UK taking into account the potential outcomes from Brexit negotiations; the table below shows the range of exchange rates during the past week to display the potential difference in returns depending on when you carried out your transfer during that time frame.
|Currency Pair||% Change||Difference on £200,000|
This release further adds to the growing calls from within the UK for quick clarity on what kind of environment UK PLC will be entering into in 9 months’ time. In fact, in the past 3 weeks multiple major international groups (namely Siemens and BMW) have openly warned the UK government that a disruptive Brexit will hinder their future plans for the UK moving forward. It will be interesting to see how tomorrow’s Markit Services data is perceived and if the overall pessimism from the manufacturing sector is shared in the services data too. With Sevices representing nearly 80% of the UK GDP, a poor reading will likely peg sterling back further, making foreign currency more expensive. If you are looking to trade your Pounds it may pay to consider your options before tomorrow’s release to limit your exposure.
This all draws huge attention to the PM’s away day meeting on Friday at Chequers. The news broke out that May will present her 3rd proposal to her divided cabinet, the details of which will likely form the basis of the long awaited White Papers to be presented to the EU.
The EU have already rejected 2 of PM May’s previous solutions to the question of Border management between the UK and Europe. Rejecting a 3rd proposal this late in the day could leave little time for recovery for the Prime Minister at which point Sterling losses should be expected. If indeed 3rd time is a charm however, then we could be looking at the foundations for long term sustainable Sterling gains.
May has called for the future trade relationship with the EU to be set in stone by 2020 to render the need of a “backstop arrangement” for the Irish border redundant. It’s a show of commitment that the markets will be well received by the markets. Though in this situation more action over words is needed to break sterling out of it’s current range limitations.
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.
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.