British negotiators have started to explore the option of delaying the UK’s final departure from the EU due to a lack of progress in key areas of negotiation. The Sterling report below discusses how this delay could potentially impact the Pound. The table below shows the range of exchange rates during trading hours yesterday and how this changes the potential return in a number of currencies when selling £200,000.00 during the high and low points of trading.

Currency Pair% ChangeDifference on £200,000
GBP/EUR0.79%€1800
GBP/USD1.27%€3340
GBP/CAD1.20%CAD$4200
Possible delay in Brexit due to delay in talks progress

European diplomats have apparently put out the feelers in Brussels to get an idea of the response of other members of the bloc’s response to an extension on deadline set out in article 50.

Conservative Member of European Parliament (MEP), Charles Tannock said there are rumours circulating in Brussels that the government seek to extend the Brexit deadline by up to six weeks, which would push the official date of departure back to May 2019.

EU officials are concerned following meetings last week where accusations were made that the government had failed to make satisfactory progress in talks. The Brexit summit is due to commence next week for crunch talks and lawmakers have expressed their doubt of achieving significant progress.

I believe their concerns are warranted, there is still yet to be a solid proposal put in place in regards to customs union access. This does not bode well for the Pound.

BOE Monetary Policy Outlook causes Sterling strength

The Bank of England (BOE) yesterday decided to keep rates on hold. There was a change in the number of votes from Monetary Policy Committee (MPC) members. With the vote landing at 6-3 in favour of keeping rates on hold.

We did see gains for the Pound when following the decision. It was announced following the decision that an August rate hike could take place.  I am not convinced considering the current economic outlook.

This did create a good opportunity for Euro buyers with GBP/EUR hitting a day high of 1.1459. I believe when interbank is above 1.1430 you are in a favourable position to trade.

GDP - Could we see further weak growth figures?

GDP data is due out next Thursday and will be watched keenly by investors. GDP is a key indicator as to the health of an economy and can influence monetary policy moving forward. The previous release saw GDP come in below expectations at 0.1%. I am slightly pessimistic and I don’t believe there will be significant growth.

It may be wise to trade before this release if you have to move short term.

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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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.