GBP gains on May’s cabinet reshuffle, but for how long?

The Pound made gains against the Euro during yesterday’s trading following Theresa May’s ‘reshuffle’ of her Conservative party as they prepare to tackle stage 2 of Brexit negotiations. Having previously been criticised for a party that many believe is ‘male, pale and stale’, May is making an effort to promote women, black and younger lawmakers to shake up her party and silence some of her critics.

The table below shows the difference you would have received when buying £200,000 at the high compared to the low over the last 30 days:

Currency Pair% ChangeDifference on £200,000
GBPEUR1.9%€4,200
GBPUSD2.3%$6,200
GBPCAD2.9%$9,840 CAD
narrow win on the brexit vote

Many of her top officials including Boris Johnson and Philip Hammond have maintained their positions, but the biggest change saw the appointment of a new Conservative party head in immigration minister Brandon Lewis. Lewis has a reputation as being a strong media performer with good communication skills, so May will be hoping that he can revitalise her weakened government since last year’s election gamble and revitalise the party’s membership.

The Pound has come under pressure this morning however, with Justine Greening opting to resign from May’s government rather than taking on a new role as work and Pensions secretary. Today sees May making changes to more junior roles within her cabinet, so keep an eye out for events as they unfold as they could have an impact on Sterling throughout the week.

Economic data this week to impact on Sterling

As well as political events there are also economic data releases tomorrow that could affect Sterling’s value. Industrial and Manufacturing Production figures are set to be released, which have performed relatively well in recent months as a result of the weakened Pound. November’s figures are set to show an improvement compared to October’s figures and if that is the case then we could see a further bout of Sterling strength. Trade Balance figures for November are also due to be released and once again with the weakened Pound at the end of last year we are set to see improvements here too.

Since the end of last week we have seen the Pound gain by more than 1% against the Euro, which on a purchase of €200,000 means that you could have saved as much as £2,174 if you had timed your transfer effectively. With the second stage of Brexit talks once again coming to a head, I personally believe that we could be in for further volatility as far as Sterling strength is concerned and therefore spikes like we have seen over the past few days should be carefully considered.

We offer a number of contracts that can help you take advantage of exchange rate spikes, so please contact your account manager at Foreign Currency Direct today on 0044 1494 725353 to find out how these could benefit you.

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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.