This update examines factors that could affect GBP exchange rates today. The table below shows the difference you would have received when buying £200,000 at the high compared to the low over the last month.
|Currency Pair||% Change||Difference on £200,000|
The Pound has been under increased pressure in recent days, as the cracks continue to widen in the Conservative party’s government. Secretary of State for International Development Priti Patel’s resignation is now the second resignation in just over a week, after Sir Michael Fallon’s resignation last Wednesday, and does not bode well for the Government leading the way into the some of the most difficult negotiations in the history of the UK.
Ms Patel’s resignation was confirmed on Wednesday, after she admitted to unauthorised meetings with Israeli officials, which breached terms of her contract.
Theresa May’s office confirmed yesterday that Penny Mordaunt (previously Minister of State for Disabled People, Health and Work) has now been given the position of Minister for International Development. It is also worth noting that Ms Mordaunt was a strong supporter of the Brexit campaign.
This latest test has reaffirmed suggestions that the Conservatives are struggling, showing major unrest within the party, whilst struggling to reach agreements with the EU over Brexit. The Pound fell by 0.5% during the course of yesterday, as the news unrattled investors who moved their funds into the more secure Euro and US Dollar.
Brexit negotiations resumed yesterday in Brussels, and EU Negotiator Michel Barnier has warned that ‘time is pressing’ to agree on a divorce bill, with just two weeks left to agree on issues such as protecting the rights of UK and EU citizens, and the Northern Ireland border. The concern is that, if these preliminary issues are not resolved, EU leaders will likely vote against discussing trade and transitional agreements at their December summit, which the UK wants to move on to.
I expect the Pound to remain at the mercy of any announcements from these negotiations over the coming days. Although GBP/EUR has fallen from the 1.14’s seen just last week, a £200,000 transfer now is still achieving an additional €13,000 compared to the lows of 1.07 just a couple of months ago. If Brexit negotiations do not make progress, I would not be surprised to see rates fall back towards 1.10 therefore taking advantage of the current levels may be a sensible option.
This morning sees a host of UK economic data to keep a close eye on, in the form of Manufacturing and Industrial Production figures, and Trade Balance data for September. This is followed by the NIESR (National Institute for Social and Economic Research) GDP (Gross Domestic Product) estimate for the last 3 months.
For more information on how future data releases could affect your currency transfer call our team of brokers on 01494 725 353.
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