Sterling fell across the board during yesterday’s trading after The House of Lords rejected governments Brexit bill following a majority vote yesterday evening. Over the course of the day a €200,000 would have cost more than £1,500 at the high compared to the low, and this goes to show just how much the uncertainty over the triggering of Article 50 is impacting on Sterling’s value.
The House of Lords’ issue with the current bill is the lack of rights given to EU citizens that are currently living in the UK.
There is an estimated 3.2 million residents in the UK that were born outside of the UK and the House of Lords argue that their amendment would help the government in negotiating reciprocal rights for UK nationals living on the continent. It now seems as though Theresa May has two options - take the bill back to the house of commons to debate once again, which could then result in a game of parliamentary ping pong as the Commons and Lords pass the bill back and forth. Alternatively she could accept the House of Lords revision and continue with the triggering of Article 50 on the initially proposed date of March 9th next week.
I would argue that the latter would probably be the best outcome for those looking to buy foreign currency with Pounds, whilst any further delays are likely to weigh on the Pounds value. Anyone who needs to buy Euros before the end of this month would be sensible to contact their account manager here to find out how we can help you protect yourself from further losses in the Pound’s value.
It was far from doom and gloom all day however for the UK economy, with the falling Pound helping the FTSE 100 to new record highs. With the Pound becoming so cheap, especially against the Dollar, shares in UK businesses represent excellent value for foreign investors at present, which seems to be helping to keep the economy afloat whilst there is so much uncertainty in the air.
With little economic data for today and tomorrow from the UK it is likely to be any developments on the triggering of Article 50 that are likely to determine rate movement. There will be spikes to take advantage of for Pound buyers and sellers, but anyone selling Euros may be wise to move sooner rather than later to capitalise on rates now. It is also worth bearing in mind that the general election in France will commence in April and this coupled with the eventual triggering of Article 50 could result in GBP/EUR breaking through 1.20.
Further movements may present themselves today for the Pound, as the Brexit bill finds its way back through the House of Commons. Get in touch with your personal broker to ensure this highly political event does not affect your foreign currency requirement. Call today on 01494 725 353 or email me here if youd like to discuss an upcoming transfer.
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