The Pound has received a welcome boost after a torrid couple of weeks with instant gains seen across all of the major currencies yesterday afternoon creating a good window of opportunity. More on the reasoning behind this quick shift in the Sterling report below, with the table showing the range of a number of exchange rates throughout trading yesterday to show the difference in return you could have achieved when selling £200,000.00.

Currency Pair% ChangeDifference on £200,000
GBPCAD1.5%CAD $5140

The change came after EU Chief Brexit negotiator Michel Barnier said the EU was “prepared to offer Britain a partnership such as there never has been with any other third country.” After all the recent talk of a no deal scenario the markets took comfort from his words which helped drive the Pound higher. He did also make clear that there won’t be any “single market a la carte.”

Although agreement on Brexit was expected to be reached ahead of the EU summit 18th October it is now widely expected that things are likely to overrun. Whilst Britain will leave the EU on 29th March 2019 sufficient time must be given to allow for both the UK and EU Parliaments to approve the withdrawal agreement.

Optimism for Sterling Across Financial Markets

Last week Michel Barnier said October was not an absolute end date and negotiations could roll into November without problems before adding that they must be wrapped up not much later than that. The risk is that if negotiations cannot be concluded and continue into December or possibly even January then the chances of a no deal scenario start to look more likely. Whilst Brexit Secretary Dominic Raab has said he still sees October as a viable date for completing the agreement it has been reported that Cabinet ministers have been told to keep their diaries free for 13th September to work on the plan for a no deal Brexit.

Those clients hoping for a quick resolution are likely to be disappointed with any agreement now expected to go right down to the wire. It could be a long wait over these next few months before any clarity is offered in which the time the pound is likely to remain under continued pressure without new direction.

Change at Bank of England?

As an aside from Brexit there will be another major and important change next year but this one will come from the Bank of England. Bank of England Governor Mark Carney will finish his term at the end of June next year which now raises question marks over who the new Governor may be. Mark Carney initially agreed to a five-year term as opposed to the usual 8 years although he extended it by another a year following the Brexit vote. Reports have emerged this week that the treasury has asked Mark Carney to serve another year although this has been denied by the treasury. It is believed that Mark Carney would like to move into politics in Canada although nothing can be ruled out at this stage. Any changes at the Central Bank will inevitably help direct the Pound in the future and so any developments will be keenly awaited. A steady pair of hands at the Bank of England will always help lend support to Sterling.

UK mortgage approvals for July are released this morning at 09:30 and should offer some clues as to the health of the UK housing market.

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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.