Its been a bullish start to the year from GBP, with the currency up against most major currencies and key pairings experiencing some of the best levels in last 12-18 months.
The most notable movement has been seen in the GBP/EUR pairing, which has seen a range across 5 cents in the last few weeks, the same it has in the last 12 months.
|Currency Pair||% Change in 1 month||Difference on £200,000|
Despite the recent drop-off from the best levels since May 2017, which saw the market briefly eclipse 1.16, the pairing seems to have found stability above 1.14 and questions will now ask whether its run of form will continue.
Since Sterling’s recent gains had been influenced by suggestions that the risk of a ‘no-deal’ Brexit scenario appeared to be on the decline, last week, developments in the House of Commons should not be ignored, as proposals which could have extended the March exit deadline until the end of this year were rejected.
A ‘no-deal’ has largely been reported as the least favourable scenario for both the UK & EU and the developments last week highlight that is not entirely off the cards, so continued volatility for Sterling currency markets should be expected.
Following last week’s developments in Parliament, Prime Minister Theresa May will head to Brussels this week to renegotiate the draft Brexit plan.
There will be particular focus surrounding the future of the Irish border, as MP’s voted to seek an ‘alternative arrangement’ that would guarantee that the border will stay open after the exit date.
This proposal, which has been put together by North West Hampshire MP Kit Malthouse, and appropriately dubbed the ‘Malthouse compromise’ or ‘Plan C’, has been widely approved as a viable solution and proposes replacing the Irish backstop with a new free trade agreement and technology at the border, in addition to an extension to the transition period in until 2021.
Despite this, it widely publicised that the EU have refused to renegotiate any amendments to the current exit plan, so Theresa May will without a doubt face a tough task ahead.
The Bank of England will hold their latest monetary policy meeting this week, and on Thursday will announce whether there will be any changes to current interest rate levels.
The Central Bank will also publish its quarterly set of economic forecasts, which will be watched closely for further signs of damage inflicted by on-going Brexit uncertainty.
It is widely expected that there will be no change to the current level of 0.75% and investors will be closely watching the following statement from the Bank’s president Mark Carney as this could influence Sterling sentiment.
Clients planning to buy or sell sterling this week, should plan around key events in order to manager their exposure to expected market volatility.
For more information, please contact your account manager here at Foreign Currency Direct.
Always a fast and efficient service, a good rate and a simple transfer.
Excellent customer service, very friendly and helpful staff. The process of money transfer is painless. Thank you.
The service was effortless to use and I was kept up to date all the way through the process with courtesy calls and advice from the same contact in the selling of my home abroad and returning the funds back to the UK. I would highly recommend this service to friends and colleagues in the future.
Efficient service and good rates. My currency reached my overseas bank same day!
I find the process to be efficient, uncomplicated, and very good value – the exchange rates used are unbeatable, and the fixed service charge is insignificant when sending a large-ish sum.