On Thursday the Government is set to release a series of advisory notes designed to prepare the UK for a “no deal” scenario. The notices will include advice for citizens, business and public bodies. The Sterling report below discusses the way this preperation for a no deal could impact the Pound. The table below displays the range of exchange rates for a number of currencies during trading on Monday, showing the difference in return you could have achieved when selling £200,000.00 during the high and low points.

Currency Pair% ChangeDifference on £200,000
GBPEUR0.55%€1220
GBPUSD0.25%$640
GBPCAD0.52%CAD $1720

In an attempt to reassure the public, Brexit secretary, Dominic Raab stated that securing a deal was still “the most likely outcome” but also added making alternative arrangements was a responsible thing to do.

This is in contrast to the comments from International Trade Secretary, Liam Fox who has said there is currently a 60% chance of a “no deal” situation.

Raab will be in Brussels this week to continue Brexit talks. He has said the advice is being put out there to make sure the UK is ready to make a success of Brexit.

He continued that the Government wanted to "clearly set out the steps that people, businesses and public services need to take in the unlikely event that we don't reach an agreement" with the EU.

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I am not convinced this information is being put out there as a contingency plan. The threat of a “no deal” scenario is real and has the potential to hit the UK economy hard.

Market reaction would seem to be consistent with this. Let us not forget we saw a rate hike from the Bank of England (BOE) earlier this month which caused a very brief strengthening of the Pound only for it to fall following comments from BOE Governor, Mark Carney stating that a “no deal” situation should be avoided at all costs.

There will be very little data releases of consequence this week, but I would be keeping a close eye on Brexit negotiations. This will be the key influence in Sterling value, with a significant chance of a “no deal” it would also be wise to be in regular contact with your broker.

At present there is little reason for optimism regarding Sterling, Brexit is anchoring the Pound and it could be set for further falls.

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.