This Sterling report will address the factors that could have an effect on exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing a number of currencies at the low and high levels during the past week.
|Currency Pair||% Change||Difference on £200,000|
A group of 25 Labour MP’s have written a letter to Chancellor Phillip Hammond asking him to publish reports about how Brexit will affect the economy. The Government has created sector-by-sector reviews evaluating how the different industries across the UK could be affected following Brexit. Previously the Government suggested that releasing the reports would be detrimental to the UK’s negotiating position and it appears the stance is going to remain the same.
Now that Brexit talks have moved a stage further with agreement on the Irish Border and Citizen Rights, trade will become the focus. After the European Council agreement before Christmas that talks have progressed to a sufficient stage to move forwards, many expected Sterling to gain. However, comments from several key figures in the European Union suggested the talks were only set to get harder.
The GBP/EUR rate hasn’t broken out of the 1.12 region since the 20th December and until the turn of the year I would expect that to remain the case. What shouldn’t be forgotten is that if you’re looking to sell Euros to Sterling you’re currently trading at a near month high.
International Trade Secretary Liam Fox has returned from a World Trade Organisation meeting in Buenos Aires, where he has said there was plenty of interest in the UK’s plans post Brexit. Fox has held talks with several countries that the UK doesn’t currently have private agreements with. In the past the Trade Secretary has talked of as many as 40 deals being signed the moment the UK leaves the EU, which could provide some assurances for businesses post Brexit.
Trade talks will be the focus of UK -EU talks over the next few months, which in my opinion could weaken Sterling further. If you do have an upcoming requirement at the turn of the year make sure you discuss your options with your broker.
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