This Sterling report will address the factors that are likely to affect exchange rates in the coming weeks if you are buying abroad or making a currency transfer.
|Currency Pair||% Change||Difference on £200,000|
Sterling has made gains across the board from the close of business on Tuesday gaining over 1.8% against the Euro, 1.62% against the US Dollar and 2.18% against the Aussie. Whilst the gains were making up for losses earlier at the end of last week, it goes to show that any good news from the Brexit discussions can have an instant positive impact on Sterling.
The reason for the jump over the last few days can be attributed to the UK’s negotiating team meeting with the European Union’s expectations with regards to the “Brexit Bill”. The deal that has been offered is estimated to come with the UK expecting to pay at least €50bn, however there will also be liabilities of €80bn with some expectations nearer to €100bn. Whilst the UK government expects they won’t have to contribute much more than the €50bn, the investment pledges made by the UK over the last 44 years of EU membership need to be covered.
Labour yesterday tabled a new amendment bill to allow Parliament to vote on the Brexit financial settlement. However, this raised questions as to how much of the Brexit bill could be shared before negotiations had completed. Chief Secretary of the Treasury Liz Truss suggested it would not be in the countries national interest to share the details of the settlement. The vote however will be held next Wednesday and could once again be another sticking point for Theresa May and her Government.
The Brexit debate will no doubt continue to take place amongst British politics themselves along with actual negotiations with the EU. But there does seem to be momentum finally growing. The jump over the last few days certainly creates belief there could be more to come. Should the EU members accept the payments being offered I believe the GBP/EUR rate could move back above 1.15 in December for the first time since the beginning of June.
Make sure you’re in contact with your broker so you can capitalise on sharp movements in your favour.
Thank you for reading my Sterling currency report, if you'd like to discuss an upcoming transfer or would like further information on the above, please feel free to get in touch on 01494 725 353 or email me here.