Theresa May's ability to guide the UK through Brexit has been called into question over the weekend, with calls for Michael Gove to replace her coming from a donor to the Tory party. Brexit developments continue to weight heavily on the Pound, today's market report discusses the way this is likely to continue impacting the Pound. The table below shows the difference in a number of currencies you could have achieved when buying £200,000.00 during the high and low points of the past week.
|Currency Pair||% Change||Difference on £200,000|
The new month of June will bring with it fresh economic data as well as the Brexit bill and the EU summit at the end of the month.
The pound finished the end of last week on a high, after better than expected manufacturing figures helped to calm investors nerves and increase sentiment that the UK economy may be at the start of a turnaround from the poor start we have witnessed so far in 2018. Whilst the economy plays a big part in the value of the pound, the biggest driver so far in 2018 has been Brexit, and is likely to continue to drive the pounds value whilst uncertainty surrounding the UKEU trade deal looms.
With Brexit comes volatility on Sterling exchange rates and it is difficult to call which way the pounds value is likely to go. Will the EU’s negotiating stance differ as they face a political crisis and will this help the UK, and therefore the Pound? Theresa May is likely to be scrutinised over the coming weeks as the Brexit bill passes through the house of commons. Claims that Theresa May is not the the right leader to take the UK into Brexit battle have been made this weekend, with a major Tory donor calling for Gove to replace her as Prime minister. With this in mind, I would largely expect the pound to remain under pressure in the up and coming weeks, with 1.1350 - 1.1450 my prediction on GBPEUR and a potential drop in GBPUSD down to 1.31 likely if the USD continues its charge.
A new month brings with it a new set of data for investors to chew on. This week, following on from the manufacturing data we see construction data and services data for the UK.
The services sector makes up nearly 80% of the UK’s economic output, therefore this is a key event and will be keenly watched to see whether the first half of the years sluggish economic performance was a blip or whether is was to to fears surrounding Brexit. a strong performance would likely increase hope for an interest rake hike in the UK at some point later this year, and alternatively a drop in this figure could pose some serious questions for the UK economy.
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.
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