Theresa May yesterday managed to fend off one of the biggest threats to her leadership so far, winning the battle in the House of Commons over Parliament’s role in the Brexit process and negotiations. The Sterling report below discusses the potential impact of this on GBP and exchange rates, the table below shows the range of exchange rates you could have achieved with the return in a number of currencies when buying £200,000.00 during the high and low points during the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
Parliament had been voting on an amendment to the EU withdrawal bill, which would have given MPs a ‘meaningful vote’ on the next steps in the Brexit process if there was a no deal or no deal agreed with the EU by the end of January. May was expected to face a rebellion from remainers within her own party as well as a number of Labour MPs and a defeat yesterday could have put her leadership at jeopardy and would most likely have resulted in a slump in Sterling’s value.
It was a close call with a small majority of 16 votes, with Former Attorney General Dominic Grieve, who had originally put the proposed amendment forward, backing down from his own amendment as he feared that without this compromise it could have caused a breakdown in government and putting a huge stumbling block on Brexit negotiations.
This victory for May now means that if there is a no deal come the 21st January, Ministers will put forward a plan of action and the Speaker will have the authority to decide on whether or not MPs should have a say in the next steps in the process. This should give May a far stronger hand in Brexit negotiations and I believe will boost the Pound in the future.
May has since announced her delight at the Brexit bill being passed through government and has promised that a White Paper will be released soon that will outline further details on their proposed relationship with the EU. This is likely to cause volatility on GBP exchange rates so we will bring the date of this release to you as soon as possible so that you can be prepared for the impact it may have on the market.
The Pound did manage to claw back some of its losses yesterday as a result of this positive progress, but I believe that there could be further volatility on GBP exchange rates today ahead of and after the Bank of England’s interest rate decision and minutes.
With the UK economy showing signs of weakness and a decline expected in recent growth forecasts from the NIESR (National Institute of Economic and Social Research) I think that the Pound could come under pressure as the chances of a rate hike in the near future are pushed back by the BoE.
At the last meeting the vote was 7-2 in favour of keeping rates on hold, but with the added global uncertainty due to Trump’s protectionist policies I would not be surprised if there was a more dovish stance in the voting today. It will also be interesting to see how the BoE react to recent global uncertainty, after the ECB also stated this week that this would have an impact on the timing of their monetary policy in the future. Carney’s comments after the release will be key and are likely to create the biggest shifts in market movement, especially if there are no hints towards a rate hike by the end of this year.
The rate decision is announced at 12.00 this afternoon, so any clients with a Sterling requirement may be sensible to speak with their account manager this morning to discuss their options.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.