This Pound Sterling update discusses the recently positive suggestions from pro-Brexit economists for the UK economy, while also looking at the potential impact of upcoming Brexit "positioning papers". The below table shows the market movements for a number of currency pairings in the last week:

Currency Pair% ChangeDifference on £200,000
GBP/EUR0.95%€2098
GBP/USD1.32%$3400
GBP/NZD1.65%NZD $5800

Pro-Brexit Economists Release Thoughts

A group called Economists for Free Trade have released a snippet of a report that suggests the UK will be significantly better off outside the EU’s trade agreement than within.

Professor Patrick Minford who is the lead author of the report stated that the EU would be the main side to suffer if the UK left without a deal, as the free trade agreements that Great Britain could sign would make goods from the European Union overpriced. Whilst the report is written from a fairly one sided opinion it is refreshing that there could be optimism for UK trade, the full report will be released in the Autumn.

Sterling threatening new highs

Two More Brexit White Papers

This week the latest of the Governement's Brexit white papers will be released and could, like the first one last week, provide a little boost for the Pound. The first white paper released about the Irish border last week was well received and did see Sterling gain half a cent against the Euro. The "Position Paper” is set to lay out to the 27 countries in the EU what the UK aims to achieve and the position they want to be in come the end of negotiations. One of the main reasons for the demise of Sterling is the uncertainty that exists due to a lack of clarity. However, these Brexit papers could provide some much wanted insight into what the UK Government are trying to achieve. This could give businesses the information that they’ve been waiting for and help boost Sterling.

Alternatively, the general trend for Sterling has been downwards and there is potentially more scope for that to continue, especially if you listen to Morgan Stanley who claim there is a real threat of parity with the Euro in 2018. The GBP/EUR rate has already lost five cents in the last 6 weeks meaning a £200,000 transfer would achieve €10,000 less Euros.

If you’re looking to complete a transfer over the next few months, whilst the rate has dropped, today’s rate may become the desired level. Contact one of our currency brokers on 0044 1494 725353 to discuss the best option for you.

News

Read more articles
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.