In the report below we take a look at why the Pound to Euro rate jumped yesterday and also discuss the events could impact exchange rates for the rest of this week. The below table shows the movements for a number of GBP currency pairings during the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.51%€5640
GBPUSD3.77%$6360
GBPAUD3.52%AUD $12560
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Sterling Buoyed by EU Parliament report

The Pound to Euro exchanged rate jumped by over half a cent yesterday morning in what was a knee jerk reaction to latest Brexit news. Yesterday was a busy day on the trading floor as Sterling finally moved out of its dormant status breaking the psychological 1.13 level on GBPEUR. Recent trends have shown the Pound to gradually drop off after breaking this level so Euro buyers may wish to capitalize on this before the EU summit this weekend, which could bring volatility.

The Pound moved on rumours that the EU Parliament is preparing a detailed 60 paragraph report that will outline how the EU will allow for more flexibility for future talks with the UK and access to the single market.

Brexit rumours are the key driver for Sterling and led to Sterling being the best performer of the day yesterday.

David Davis’ speech in Vienna

The rumours from the EU parliament came just as David Davis, the secretary of the UK leaving the European Union delivered his speech in Vienna. David Davis was the latest to speak in an instalment of speeches, delivering the UK Government’s latest developments surrounding Brexit.

His speech in principle was to try to calm fears that the UK was trying to keep the standards of the European Union as much as possible and to create a trade deal which creates as little friction as possible. He later tweeted that the UK would not be plunged in a ‘mad max’ style economy after Brexit.

All in all a busy day on the markets yesterday as both sides prepare for the EU summit this coming weekend. The EU summit has been acknowledged as a major event which could have huge ramifications for the Pound. As this event is outside trading hours, why not discuss a limit order or stop loss with your broker to make sure you are covered.

Wage Growth and its impact on Sterling

Today marks an important day for UK economic data. One of the reasons the Pound has remained above 1.12 of late is because the markets are pricing in a rate hike from the Bank of England later this year. Currently, the chances of a rate hike in May are 80%. Markets will be carefully following the Bank of England’s testimony after the report is released. I expect a slightly more hawkish tone to the House of Commons Treasury Select Committee and we could see sterling strength.

This is why today's earnings data carries such importance, if this report is negative I would expect the Pound to slide tomorrow as the chances of a rate hike in May would likely diminish. I’d always suggest being in touch with your broker at FCD ahead of any data releases of this magnitude to make sure you are covered.

For more information on how upcoming events could affect your currency transfer, call our team of currency brokers on 01494 725 353.

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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.