Sterling made gains against the majority of major currencies last week following news of progress in Brexit talks between Theresa May and Jeremy Corbyn.
|Currency Pair||% Change (Month)||Difference on £200,000|
Theresa May is attempting to put together a deal that will be mutually accepted by both parties. Personally, I feel this is a tall order considering she is unable to get a deal together that is widely accepted by of her own Party.
It is anticipated May will put forward her first formal offer to Labour. The Conservatives are expected to put forward a temporary customs deal. It is claimed this will give the UK the benefits of being in the customs union while allowing some trade deals to be negotiated but not signed off. The arrangement would stay in place until a general election. At that point Labour could campaign for permanent access to the customs union.
May has also stated she would like to get a deal together before the European elections on 23rd May and it is a matter of urgency.
May’s deal has failed to go through the House of Commons on three occasions and Brussels' stance remains unchanged. It has been stated on several occasions the deal on the table is the only deal and there will be no concessions made on the Irish border.
Another catalyst for sterling’s gains was positive news from Bank of England (BoE) governor, Mark Carney.
He said that the future of interest rates in the UK would largely depend on the progress made on Brexit, and that he was hopeful about a resolution. This news boosted investor confidence and in turn sterling.
Theresa May spoke on Friday at the Scottish Conservative conference and following the loss of more than 1000 seats in English Council elections has vowed to deliver Brexit.
She said voters want the Brexit issue resolved so the country can move on.
Despite calls for the PM to resign Mrs May insisted that she remains determined to deliver a deal that will ensure Britain has a "bright future".
If we look at GBP/EUR, the highest the interbank rates have been in 2 years is 1.1805 and this was when it looked like there was set for a deal on the Irish border. The GBP/EUR interbank rate is currently very close to that hovering around 1.17.
Should you have a currency requirement you may choose to consider taking advantage of current levels as there is no certainity the pound’s current value will continue while we still remain in Brexit limbo.
On Friday we will see the release of UK Gross Domestic Product (GDP) figures. GDP has the power to influence the market and it will be interesting to see how the economy is coping considering the current Brexit situation.
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